COVID-19: Sitharaman’s second tranche of economic stimulus fails to enthuse

Experts question announcements made for street vendors, small and marginal farmers and migrant workers

By Rajeev Khanna
Published: Thursday 14 May 2020

The second tranche of the economic stimulus package unveiled by Union Minister of Finance Nirmala Sitharaman on May 14, 2020, to address the concerns of migrant labourers, small farmers and street vendors, has failed to enthuse experts.

A section have questioned the model adopted by the government to address the plight of these communities, who have been most hurt during the lockdown that has followed the novel coronavirus disease (COVID-19) outbreak in India.

What Sitharaman unveiled on May 14 made very little sense, Hemant Shah, an Ahmedabad-based economics expert, said.

“It is all about loans, loans and loans. There is nothing being given to the people in terms of cash except for the announcement pertaining to interest subvention on Shishu loans. It is time people get hard cash in their hands,” he said.

“If you just dissect the government claims on the people days generation and the number of people to whom work has been offered under the Mahatma Gandhi National Employment Guarantee Act (MNREGA) and divide the previous with the latter, you will get a clear picture as to how little people have benefited,” Shah added.

He noted that the figures given by the government on street vendors were highly skewed. Their number was not five million but at least 20 million.

“A survey in 2015-16 had put the number of street vendors in Delhi alone at two million and just a decade ago, there were 66,000 street vendors in Ahmedabad alone. It also needs to be seen when these street vendors will get the credit facility announced in their hands,” Shah said.

Sitharaman also announced a Rs 30,000 crore additional emergency working capital fund under the National Bank for Agriculture and Rural Development or NABARD.

This will once again translate into a loan for small and marginal farmers whereas a waiver was what was really needed at this time, said Shah.

The government should also give a breakup of the Rs 11,000 crore that it claimed to have utilised in the last two months for the urban poor, he added.

Migrant workers and farmers

The government’s proposals for providing affordable rental accommodation to migrant labourers have come in for scathing criticism.

The questions being raised are:

  • Who knows when these structures will come up?
  • Who will live there?
  • Which industrial house will come forward to build these houses in this era of contractual employment marked by hire and fire approach?

“There are several acts passed in the past that call for providing residential accommodation to workers in various industrial houses. These acts have been largely violated with impunity in the past,” Vipul Pandya, a labour activist representing Bandhkam Mazdoor Sangathan in Gujarat, said.

“What is the guarantee that the government move in this direction now will bear fruit? What is the guarantee that this move will not end up as yet another subsidy to the corporate sector now?” Pandya questioned.

Labourers had lost all confidence in the government, said Pandya. A huge amount of money, some Rs 52,000 crore lying with the labour welfare boards in different states of India, could have been utilised for the welfare of migrant workers at this hour.

“Barring states like Delhi, Punjab and Uttar Pradesh, there has been little movement in utilising this money. Just Rs 10 crore could at least have been utilised in transporting them home. The least that needs to be done is to give direct benefit to the workers,” he said.

The announcements made on May 14 were ‘frustrating’ in the context of small and marginal farmers, according to agricultural economics expert, Gian Singh, from Patiala.

“Bringing in new farmers under the Kisan Credit Card (KCC) net and extending it to fisheries and animal husbandry is a welcome move, but the government is silent on how to prevent this credit turning into debt,” he said.

“The linkage that can benefit the farmer amid old debt and new loan is missing. What the farmers need is an instant cash relief and the focus needs to be on income generation,” he added.

The need of the hour was to provide instant relief to the small and marginal farmer, who has been unable to get remunerative returns on his produce except for wheat, Singh said.

Citing the example of green chilly in Punjab these days, he said the produce was being sold at Rs 80 per kg in the market while the farmer was getting just Rs 2 and the cost of harvest was coming to Rs 4 per kg. A similar instance had been observed for capsicum producers and dairy farmers.

There have been instances in Punjab over the last few days where farmers have been dumping their produce on the roads.

Singh also raised several questions on government claims of generating employment for migrant workers under MNREGA.

“The government has been cutting down budgetary allocation under MNREGA. How does it aim to provide more employment and payment under the scheme? Second, the government move on raising the minimum wages under MNREGA from Rs 182 to Rs 202 is a good move yet it stands in violation of the Minimum Wages Act implemented in different states as it is very low,” he noted.

Third, there were hardly any states that provided 100-day employment guaranteed under MNREGA.

“Studies point out that in states like Punjab, the average employment provided is 25 days and people face a lot of problem in getting their wages. During these times, the government should provide 365-day employment to workers,” Singh said.

The free Public Distribution System relief in terms of wheat, rice and grams announced for migrant labourers was very little as people who had walked hundreds of miles needed far more nutrition, Singh added.

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