Coronavirus lockdown: Rs 60k-crore income support plan for poor in works

The Narendra Modi government is said to be considering an income support scheme for those worst hit by the slump in economic activity owing to the coronavirus pandemic and the resultant nationwide lockdown.

The scheme could mean transferring Rs 5,000-6,000 into the bank accounts of 80-100 million poor families, Business Standard has learnt.

A one-time transfer of Rs 6,000 each into 100 million accounts will cost the exchequer Rs 60,000 crore. However, given how dynamic the situation is, officials are not yet willing to give the monetary size of the package.

There are also discussions on allowing a deferment of equated monthly instalments (EMIs) for targeted individuals, and loan repayments for micro, small and medium enterprises (MSMEs). But this will require providing some support to the banking system as well, sources said.

These measures are likely to be part of a comprehensive economic package to fight the downturn in the country, which is currently locked down to contain the spread of coronavirus. The package can be announced any day now.

There are also discussions on allowing a deferment of equated monthly instalments.

News agency Reuters reported that the size of the economic package could be anywhere between Rs 1.5 trillion and Rs 2.3 trillion. Any stimulus package will not only include the monetary component of an income support scheme, but also for MSMEs and others.

As of Wednesday, COVID-19 had infected 440,321 people globally and over 606 in India.

“Economic activity has come to a near halt. Work in factories, workshops, farms, the services sector, and other labour-intensive sectors has just stopped. The poorest families, especially those dependent on daily wages, will not be able to survive the lockdown,” said a person aware of the deliberations in the COVID-19 economic response task force.

The task force, , headed by Finance Minister Nirmala Sitharaman, comprises ministers in the Centre, members of Parliament, serving and retired bureaucrats, representatives from India Inc, domain experts, and economists.  “There is no clarity on whether the lockdown will last beyond 21 days. So, will more payments be required for the most affected people? What will be the support given to the financial system? What will be the revenue foregone for all the delayed tax payments? 

These points are still being discussed,” said a second official.

BOOSTER DOSE ON THE CARDS

*One-time transfer of Rs 5,000-6,000 into the accounts of about 100 million poor families

*Loan deferment for MSMEs

*EMI deferment for individuals under certain conditions

*Borrowings for FY21 could be increased, from the current planned gross borrowing of Rs 7.8 trillion

*Uncertainty about immediate future hampering efforts to finalise the size of the package