Covid economic package: government safety net for migrant workers and the poor has little for now, more for later

4 am, Thursday A migrant family on their way home to UP, outside the Mayur Vihar metro station in Delhi. Gajendra Yadav

There was an expectation that a package targeting migrant workers, farmers and street vendors would strive to offer immediate relief as they have endured the brunt of the confinement-related angst for more than 50 days. But more than half of the nine main proposals announced by Union Finance Minister Nirmala Sitharaman on Thursday have a longer-term horizon.

Furthermore, the second part of the aid package continues with the basic design of tapping the big stimulus with minimal fiscal cost: from the infusion of total liquidity of Rs 3.10 lakh crore, the probable outflow of the Treasury from the Center is only about Rs 5,000 crore.

Thursday’s measures targeting the poorest segments of society, including migrant labor, small and marginal farmers and the urban poor, appear to be more biased in the long term.

For example, the affordable rental housing scheme under Pradhan Mantri Awaas Yojana for migrant workers and the urban poor is likely to be implemented only over a longer period of time. Similarly, the portable ration delivery system is slated to be completed only in March of next year. The street vendor line of credit and the extension of the subsidy scheme linked to middle-class credit (Rs 6-18 lakh annual income) are also considered measures that would take time to implement and are unlikely to provide any relief from the crisis immediate. faced by workers.

The announcement of the free supply of food grains (5 kg of grains and 1 kg of chana per person) for two months to 8 million migrant workers without a ration card and outside the scope of the National Food Safety Law was expected to provide some relief to migrant workers.

Explained | What is the “One Nation, One Ration Card” system announced by the Minister of Finance?

But experts said this involves solving complicated logistical problems. Since each public distribution store has a fixed number of registrants on the basis of which the stock of food grains is supplied to the store, allowing access for non-cardholders can lead to shortages of supplies at these points selling.

The other “One Nation One Ration Card” proposal, first announced by Food Minister Ram Vilas Paswan in July last year and then intended to be completed in June 2020, is considered a system of considerable utility to migrants.

But this also suffers from the incomplete value chain constraint backed by infrastructure, including the availability of point-of-sale systems in PDS stores and joining states. Therefore, this is unlikely to address the immediate problems facing migrant and transit workers in distress.

Experts said that given the ambiguity about the differentiation between non-cardholders and cardholders under the “One Nation, One Ration Card” proposal, a worker could take ration from a store and then identify as a non-cardholder. the card in another store.

“One of the main problems would be how to identify migrant and non-migrant workers if the applicability of the uniform ration card is carried out throughout the country. The administration will face problems on the quantity of stocks of food grain supplies to ship to which store, since each store has a fixed quota, which could later become a major logistical problem, “said Pronab Sen, economist and former chief statistician from India.

The exclusion of beneficiaries from the PDS distribution could be avoided by suspending the ration card system for now and relying on Aadhaar for the distribution of food grains, Sen said.

The proposal on the deployment of affordable rental housing under PMAY by engaging private industry through a public private partnership on government land is also unlikely to provide benefits to ease the short-term distress that is unfolding.

“It is not going to happen soon. Furthermore, details on PPP modalities were not elaborated today and should be analyzed, ”said Partha Chatterjee, professor and head of the Department of Economics at Shiv Nadar University.

The provision for Rs 2 lakh crore credit on concessional terms to 2.5 million farmers, including fishermen, also depends on the delivery of new Kisan Cards.

The Rs 5 billion credit facility for 50 lakh street vendors will translate into a working capital of only around Rs 10,000 per street vendor for a month.

Analysts said the street vendors could have been better served with cash transfers. “The street vendors will be much more disappointed than the migrant workers, as they are only getting ‘easy access to the line of credit’ and that too ‘in a month’ … If they had not been given credible forms of support for the income since they could not and could not sell their products since March 26? Why couldn’t the government think of the immediate transfer of direct benefits to the stranded migrants and the five million street vendors and the free ration for the latter if they have not used it for lack of a ration card under the Pradhan Mantri Garib Kalyan Yojana?

Why isn’t the government talking about a fixed amount DBT of saying Rs 5,000 that will, in fact, go back to the business in the form of purchases and then possibly to the government, at least a portion, as tax? said K R Shyam Sundar, a labor economist and professor of Human Resources Management at XLRI.

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