Ration for migrants, farm relief in 2nd tranche of govt stimulus – business news

Free food grains and pulses for migrants, more jobs for tribals and those in rural areas, and credit to small enterprises, street vendors and small farmers — these were some of the highlights of the second phase of the government’s Rs 20 lakh crore Atmanirbhar Bharat Abhiyan (Self-reliant India Scheme) announced on Thursday.

Totalling Rs 3.16 lakh crore, the schemes include 5kg rice or wheat and 1kg ‘chana’ (chickpea) a month, for 80 million migrant families for two months (which will cost Rs 3,500 crore); a Rs 1,500-crore interest discount scheme aimed at 30 million units; a Rs 5,000-crore special credit facility for five million street vendors; a Rs 6,000-crore Compensatory Afforestation Management & Planning Authority (CAMPA) fund for providing jobs to tribals; a Rs 30,000 core emergency working capital scheme for farmers; a Rs 70,000-crore boost to lower-middle class housing; and Rs 2-lakh crore concessional credit offer to 25 million farmers through Kisan Credit Cards.

One part of the focus of Thursday’s announcements, experts said, seemed to be to take care of the emergency food needs of migrant workers, many of whom have returned home from the cities after losing their livelihoods. “One nation, one ration card will be implemented in the next three months and it is expected to benefit 670 million people in 23 states,” finance minister Nirmala Sitharaman said while announcing the package.

The first tranche of the package, totalling about Rs 5.9 lakh crore, which was announced by Sitharaman on Wednesday, was mainly focused on providing easy credit facilities to micro, small and medium enterprises (MSMEs) and non banking finance companies; a fund for debt-laden electricity distribution companies or discoms; a partial wage support scheme (for two months) for small companies; and ways to put more cash in the hands of people.

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Prime Minister Narendra Modi on Tuesday announced ‘Atmanirbhar Bharat Abhiyan’, a special economic and comprehensive package of Rs 20 lakh crore, about 10% of India’s gross domestic product (GDP), to revive the economy which has been battered by a prolonged lockdown since March 25 to check the spread of Covid-19. This also includes a Rs 1.7 lakh crore package already announced on March 26 and monetary measures aggregating to around Rs 5.7 lakh crore taken by the Reserve Bank of India (RBI) since March 27.

Unveiling the second tranche at a media briefing, Sitharaman said the short-term and the long-term measures are meant to support the poor, including migrants, farmers, tiny businesses and street vendors. “ Farmers and workers are the backbone of this nation. They serve all of us with their sweat and toil,” she said.

The finance minister said free food grains will be supplied to migrant families in May and June this year and the scheme will cover all those who are not covered under the National Food Security Act or who do not have a ration card in the state where they are stranded. “8 lakh MT of food grain and 50,000 MT of chana shall be allocated,” she said.

Union food minister Ram Vilas Paswan told HT the Centre won’t insist on any upfront documentation for free grains to migrants. States may send details of utilisation later. Grains will be distributed from Friday, he said, adding that trains were ready for the purpose.

Manobi Sinha, a labour economist with the Allahabad University, said: “The government has finally heeded the call of so many concerned people by assuring free food to migrants. I think as a one-time exception, this should be done without demand of any documentation, including Aadhaar.”

In order to have a robust food security system, the government will use technology-enabled ration card system — One Nation One Ration Card — so that all beneficiaries can access ration under the public distribution system from anywhere in the country by March 2021. The pilot scheme for this will cover 670 million people by August.

The government has also decided to launch an affordable rental housing scheme for migrant workers and urban poor, Sitharaman said. “This will be done through converting government funded houses in the cities into Affordable Rental Housing Complexes (ARHC) under PPP [public-private-partnership] mode through concessionaire, manufacturing units, industries, institutions, associations,” she said. The concessionaires can use their private land for the purpose. The Centre and states can also use public land for ARHC. The administrative ministry will soon announce details of the scheme, she added.

A Credit Suisse equity research report of May 13 estimated that part one of the economic package worth Rs 13 lakh crore has already been done by Wednesday and Rs 7 lakh crore was yet to come.

A finance ministry spokesperson, however, declined comment on the numbers.

To provide relief to micro enterprises that can avail loans up to Rs 50,000 under the MUDRA Shishu scheme, the Centre has decided to provide a 2% interest subvention for 12 months to the borrower, the finance minister said. Micro Units Development and Refinance Agency (MUDRA) supports development of micro enterprises and provides refinance support to lending institutions.

The government also announced the plan to launch a special scheme next month to provide easy access to credit to street vendors in rural and urban areas. Under this scheme, bank credit facility for initial working capital up to Rs 10,000 will be extended to each. “Use of digital payments and timely repayments will be incentivised through monetary rewards,” minister of state for finance Anurag Singh Thakur, who also addressed the press conference, said. The scheme is expected to benefit 5 million street vendors and involve a credit flow of Rs 5,000 crore, he added.

Sitharaman said the government has approved a proposal of states to provide job opportunities in tribal areas under the Compensatory Afforestation Management and Planning Authority (CAMPA). “Government of India will grant immediate approval to these plans amounting to Rs 6,000 crore,” she said. The money will be used for afforestation and plantation works.

She also announced housing for people in the middle income group — annual Income between Rs 6 lakh and Rs 18 lakh — through extension of credit-linked subsidy scheme under the Prime Minister Aawas Yojana (Urban). It will benefit 0.25 million middle income families during 2020-21 and will lead to investment of over Rs 70,000 crore in the housing sector, the finance minister added. “This will create significant number of jobs by giving boost to housing sector and will stimulate demand for steel, cement, transport and other construction materials,” she added.

Sitharaman said farmers need emergency working capital and that NABARD will extend additional re-finance support of Rs 30,000 crore to them. It can be used for meeting crop loan requirement of Rural Cooperative Banks (RCBs) and Regional Rural banks (RRBs). “This refinance will be front-loaded and available on tap. This is over and above Rs 90,000 crore that will be provided by NABARD to this sector in the normal course,” she said, adding that the move will benefit around 30 million farmers who are mostly small and marginal.

The government will also launch a special drive to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards, the finance minister said. “This will inject additional liquidity of Rs 2 lakh crore in the farm sector and cover 25 million farmers”

Bharatiya Janata Party (BJP) president JP Nadda tweeted that the FM’s announcements offering affordable rental housing to urban poor, support to returning migrant workers, and central assistance of Rs 11,000 crore to states for free accommodation and food in urban shelters show PM Modi’s sensitivity towards the poor and marginal people.

“I welcome announcements by FM @nsitharaman Ji for the benefit of migrant workers. Free food for two months to 8 Crore migrants, nationwide implementation of One Nation One Ration Card Scheme are major initiatives to ensure food security for migrant workers,” he tweeted.

The Congress said the government’s economic package has so far fallen way short of what the Prime Minister had promised.

Anand Sharma, a senior spokesperson of the party, said the country believed that Prime Minister Narendra Modi was serious when he made the “dramatic” announcement of giving 10% of the GDP as a package to revive the economy and support workers and migrant labourers, and that expectations had soared. “The finance minister’s announcement dashed all hopes,” he said.

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