Home / News / India /  Govt may extend social safety net till March under stimulus 3.0

NEW DELHI: The central government is likely to extend cash and in-kind social assistance to protect poor and vulnerable households, it announced under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), till March as part of its third stimulus that is being prepared for announcement soon.

“The fresh measures will be a mix of demand stimulus and social safety measures," a senior government official said under condition of anonymity. The announcements will hold political significance as they may be announced in the midst of the assembly poll in Bihar and by-elections across 11 states including Madhya Pradesh, Gujarat and Uttar Pradesh.

The Centre announced PMGKY in March as safeguard measures against the coronavirus pandemic, initially for three months till June and later extended it for another five months till November. Government provides 5 kg rice or wheat per person to 81 crore beneficiaries and 1 kg (chana) to 19.4 households free of cost under the National Food Security Act. These benefits may now be extended till the end of the current financial year in March. The fresh stimulus may also include cash transfers to 20 crore JanDhan accounts and 3 crore poor senior citizens, poor widows and poor divyang that were part of the PMGKY.

The poor and vulnerable are likely to remain the focus of the government with international agencies like the World Bank warning that the coronavirus pandemic is pushing millions of Indians into poverty and eroding the hard-fought gains made in the past two decades.

“Extension of the Yojana is in line with the commitments of the Government of India not to allow any body, especially any poor family, to suffer on account of non-availability of food grains due to disruption during next five months," the Cabinet statement announcing the extension of PMGKY in July said.

Almost half of India’s population was vulnerable to slipping back into poverty even prior to covid-19, with consumption levels were precariously close to the poverty line, despite absolute poverty reduction in the past two decades, the World Bank said in August. The National Sample Survey Office data suggests that a 30-day period without work can reduce household consumption expenditures for the poorest quintile by 10%.

Kerala finance minister Thomas Isaac last week tweeted: “We have unprecedented stock food grains but India continue to be at the bottom of Global Hunger Index at 94 with 14% of people undernourished and 37% of children stunted. Time for introspection of our public distribution system. Revamp PDS."

The initial signal of a third stimulus by the government was given by finance minister Nirmala Sitharaman on 19 October two days after which economic affairs secretary Tarun Bajaj confirmed that the finance ministry is working on the next stimulus package so that “push to the economy which is very much needed in these stressful times is provided".

While the finance ministry has announced two stimulus packages of around 1.5% of GDP, the first being the Atmanirbhar Bharat Yojana in May and the latest earlier this month, critics have pointed the government’s cautious fiscal response to the coronavirus induced recession compared to India’s peers and other large countries.

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