measures-for-supporting-the-poor-including-migrants-farmers-tiny-businesses-and-street-vendors-summary

Context:  Union Finance Ministry announced the 2nd Tranche of measures to ameliorate the hardships faced specifically by migrant labourers, street vendors, migrant urban poor, small traders self-employed people, small farmers and housing, amid COVID-19.

Background: 

  • Recently, the Hon'ble Prime Minister announced a Special economic and comprehensive package of Rs 20 lakh Crore - equivalent to 10% of India’s GDP on 12th May 2020. 
  • The package known as Self-Reliant India Movement or Aatmanirbhar Bharat outlined five pillars - Economy, Infrastructure, System, Vibrant Demography and Demand.

Measures: Following short term and long-term measures - 

  1. Free food grains supply to migrants for 2 months
    1. For the migrant labour, additional food grain to all the States/UTs at the rate of 5 kg per migrant labourer and 1 kg Chana per family per month for two months free of cost shall be allocated. 
    2. Migrant labourers not covered under National Food Security Act or without a ration card in the State/UT in which they are stranded at present will be eligible. 
    3. States/UTs shall be advised to put a mechanism for targeted distribution as envisaged in the scheme. 

The entire outlay of Rs. 3500 crore will be borne by the Government of India.

  1. One Nation one Ration Card: Technology system to be used enabling Migrants to access PDS (Ration) from any Fair Price Shops in India.
    1. Pilot scheme for portability of ration cards will be extended to 23 states. 
    2. By this, 83% of the PDS population will be covered by National portability of Ration cards. 
    3. 100% National portability will be achieved by March next year. 
    4. Impact: 
      1. This scheme will enable a migrant worker and their family members to access PDS benefits from any Fair Price Shop in the country. 
      2. This will ensure that the people in transit, especially migrant workers can also get the PDS benefit across the country.
  2. Scheme for Affordable Rental Housing Complexes: For Migrant Workers and Urban Poor to be launched.
    1. This will be done through converting government funded houses in the cities into Affordable Rental Housing Complexes (ARHC) under PPP mode through concessionaires.
    2. Impact: Will provide
      1. ease of living at affordable rent. 
      2. social security and quality life to migrant labour, urban poor, and students etc. 
  1. 2% Interest Subvention for Shishu MUDRA loanees:
    1. Government of India will provide Interest subvention of 2% for prompt payees for a period of 12 months to MUDRA Shishu loanees, who have loans below Rs 50,000.
    2. This will provide relief of about Rs 1,500 crore to Shishu MUDRA loanee.
  1. Credit facility for Street Vendors:
    1. Under this scheme, bank credit facilities for initial working capital up to Rs. 10,000 for each enterprise will be extended. 
    2. This scheme will cover urban as well as rural vendors doing business in the adjoining urban areas. Use of digital payments and timely repayments will be incentivized through monetary rewards. 
    3. Impact: It is expected that 50 lakh street vendors will be benefited under this scheme and credit of Rs. 5,000 crore would flow to them. 
  1. Extension of  Credit Linked Subsidy Scheme for MIG under PMAY(Urban):
    1. The Credit Linked Subsidy Scheme for Middle Income Group (annual Income between Rs 6 and 18 lakhs) will be extended up to March next year. 
    2. Impact:
      1. This will benefit 2.5 lakhs middle income families during 2020-21 and will lead to investment of over Rs 70,000 crore in housing sector. 
      2. This will create a significant number of jobs by giving a boost to the Housing sector and will stimulate demand for steel, cement, transport and other construction materials.
  1. Creating employment using CAMPA funds:
    1. Approximately Rs 6,000 crore of funds under Compensatory Afforestation Management & Planning Authority (CAMPA) will be used for Afforestation and Plantation works, including in urban areas. 
    2. Impact: This will create job opportunities in urban, semi-urban and rural areas and also for Tribals (Adivashis).
  1. Additional Emergency Working Capital for farmers through National Bank for Agriculture and Rural Development (NABARD):
  1. NABARD will extend additional re-finance support of Rs 30,000 crore for meeting crop loan requirements of Rural Cooperative Banks and RRBs
  2. This is over and above Rs 90,000 crore that will be provided by NABARD to this sector in the normal course. 
  3. Impact: This will benefit around 3 crore farmers, mostly small and marginal and it will meet their post-harvest Rabi and current Kharif requirements.
  1. Credit boost to farmers  under Kisan Credit Card Scheme:
    1. A special drive to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards. Fisherman and Animal Husbandy Farmers will also be included in this drive. 
    2. Impact: This will inject additional liquidity of  Rs 2 lakh crore in the farm sector. 2.5 crore farmers will be covered.

Significance: 

  • While the first set of measures was geared towards ensuring liquidity flow to various parts of the economy, the second aims to ensure food security for migrant workers.
  • The measures will ease credit flows to the more vulnerable sections of society - street vendors and small farmers, among others. 

Issues:

  • MGNREGA: As in the past, this remains a lifesaver for people dependent on fragile livelihoods, and the decision to extend it to the monsoon season is welcome. 
    • The government should also ensure that wages are paid without delays, a major problem with the scheme’s implementation lately. 
    • It is now up to the States to ensure the scheme is implemented properly.
  • NFSA: The government could have extended the Public Distribution System coverage to include more people who are suffering from loss of jobs and livelihoods, besides migrant workers. 
  • One nation, one ration card scheme: The scheme, as implemented now, has been utilised only sparingly by migrants, and concerns from States like Tamil Nadu where PDS is near-universal are yet to be addressed. 
  • Farmers: Many of the announcements, including one for small farmers, are a combination of liquidity and credit-easing measures or the extension of existing schemes. As things stand, they fall short of the substantive fiscal measures that could stimulate demand in the economy. 
  • The credit linked subsidy scheme for affordable housing has been extended by another year - but with questions over job/income security, its ability to spur demand for affordable housing is questionable. 
  • Problems of identification of beneficiaries: India is also well-known for the problems of identification of beneficiaries for government schemes. 

Way ahead:

  • Foodgrains will offer immediate relief, but workers need more substantive support.
  • A waiver or at least an extension of the 100-day limit per household for MGNREGA too would have helped.
  • Distress of poor migrants is greater than relief announced by the government. Hence, more needs to be done.

Source: https://pib.gov.in/PressReleseDetailm.aspx?PRID=1623862