November 07, 2026

It Looks As If Even 13 Zeroes Will Not Alleviate The Immediate Pain Of A Large Number Of People

By Sunil Garodia
First publised on 2020-05-15 19:09:40

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Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Author of Cyber Scams in India, Digital Arrest, The Money Trap and The Human Hack

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There are many ways of providing relief to the people. Some are direct, like money transfers in bank accounts of the poor and the lower-middle-class. Others are making money available to businesses through loans so that they can tide over difficult times and repay the same when the business is back on track. Initially, when the lockdown was announced, the government said that it would transfer Rs 500 per month for three months in the accounts of women Jan Dhan account holders. The first installment of that scheme was transferred in April to nearly 20 crore account holders. In total, the government will transfer Rs 30000 crore through this route. This was in addition to the announcement of providing 5 kgs of wheat or rice and 1 kg of pulses free for three months starting April 2020 to nearly 80 crore beneficiaries covered under the National Food Security Act. The quota of the subsidized ration they used to get was also increased by 2 kgs for the same period.

But subsequently, the focus has moved from freebies (apart from providing 5kgs wheat or rice and 1 kg chana to migrants free for two months) to providing money to businesses and individuals by the dual method of providing loans or deferment of EMIs and reducing rates of certain statutory payments like EPF and TDS. First, the RBI announced that people having loans with any bank could opt for deferring their EMIs for March, April and May and pay them, along with applicable overdue interest, as a lump sum in June. This would have come as a huge relief to those whose businesses were closed due to the lockdown. But ideally, since the situation has not improved, this moratorium should be extended for another three months, if not more.

Then, as part of the Rs 20 lakh crore economic package announced by the Prime Minister, collateral-free loans are being provided to MSMEs and other loans and guarantees are being provided to specific sectors. The government has also expanded the scope of credit under the Kisan Credit Card, has announced a working capital loan scheme for 50 lakh street vendors, Rs 2 lakh crore concessional credit to 2,5 crore farmers, raising the minimum wage to Rs 202, making ration cards portable and extending the benefits for housing under the CLSS for middle-income groups. It has also announced an investment of Rs 1 lakh crore in agricultural infrastructure to ensure cold chains and modern mandis close to areas of crop cultivation to ensure that farmers get the right price for their produce.

These are all good measures but somewhere they fall short. The government should have gone for a better mix of direct benefit and liquidity. The migrants need monetary support now. Instead, they are being hounded by the police across the country. Also, the government has promised them employment under MNREGA but it is doubtful if the system will be able to absorb such a huge inflow. Along with providing grains and pulses, the government could have given them one-time support of Rs 1000 per month for three months to provide some relief. More tranches of the economic package are due but the bigger picture is now clear. This picture says that while the government has initiated many measures, it has maybe got the mix wrong. Now, the total issue hangs on the demand factor. If the money that is being put in the hands of the people translates into better demand for goods and services after the lockdown is lifted, companies will start doing good business and the cascading effect, as well as buoyancy in tax collections, will ease the pressure across the board and things will be good again. Till then, there is more misery in the offing for the poor and the lower-middle-class.