NEW DELHI :
The economic welfare package the government announced on Thursday may have a little less than the desired effect as some of the payments are either front-loading of already allocated funds or routine annual increases rather than new money, experts say.
The welfare payments are meant to give relief to unorganized sector workers, farmers and the poor who face loss of livelihood and economic hardships triggered by the Coronavirus crisis.
The new measures include doubling the food grain entitlements for three months, intended to benefit two-thirds of the population, free of cost, refilling of cooking gas cylinders for 80 million households and the government paying 24% of monthly wages of workers to Provident Fund accounts.
However, some of the other elements in the package are advance payments or wage revisions under existing schemes. “Wages under the Mahatma Gandhi National Rural Employment Guarantee scheme are revised annually around this time of the year. Also, the ₹2,000 payment to farmers under PM-Kisan Yojana referred to in the package is front-loading of already budgeted allocation," said Dipa Sinha, faculty at Ambedkar University, Delhi.
Further, the cost of offering a ₹50 lakh insurance scheme for health workers announced in the package is not expected to be very high because few people are expected to avail of it, which calls for further clarity on the ₹1.7 trillion stimulus announced on Thursday.
An email sent to government seeking a clarification remained unanswered at the time of publishing. A government official, however, explained that the increase in MGNREGA wages this year has taken into account the crisis in the economy. Income from the rural job guarantee programme is seen as a lifeline for rural communities in times of distress.
The revision in wages announced for this year—in the range of ₹13 to ₹34—is the highest in the last six years, two people familiar with the development said. The government raised the FY20 allocation for the rural job guarantee scheme from ₹60,000 crore to ₹70,002 crore when it presented revised estimates in February. For FY21, the allocation is ₹61,500 crore.