The Indian government announced an economic spending plan worth 1.7 trillion rupees, $22.5 billion, on Thursday. The measure was designed to help low-income households cope with the county’s 21-day lockdown in response to the coronavirus outbreak.
The nationwide lockdown to stop the spread of the virus was crucial for a country where millions of people live in proximity, some in densely populated slums and where access to health care is scarce. And while officers throughout India are enforcing lockdown restrictions — in many cases by using force — the country’s working class and small business owners are bearing the brunt of the shelter-in-place situation. According to the international labor organizations, 90% of India’s workforce is employed in the informal sector, and most do not have access to pensions, sick leave, paid leave or any kind of insurance.
The stimulus package plans to boost the amount of food security and cash transfers for the most vulnerable of the country’s 1.3 billion citizens.
“Those affected directly, particularly the poor, the migrant workers, the woman and the disadvantaged of the society will be reached out with tangible help and assistance,” said Finance Minister Nirmala Sitharaman in a news briefing. “We do not want anyone to remain hungry.”
The government aims to distribute 5 kilograms of wheat or rice for each person free of cost every month, with 1 kilogram of pulses, which includes beans, lentils, chickpeas and dry peas. The food security measures will affect 800 million people, according to Sitharaman.
The plan also includes insurance coverage of 5 million rupees, or $66,000, for every front-line medical worker, three months of free cooking gas for the poor and state-sponsored contributions to retirement funds for the same duration.
Sitharaman did not provide details on how the program will be funded in a country that always walks a line in terms of its fiscal deficit. The program will be effective from April 1, the beginning of India’s new fiscal year 2020-21.
However, some economists argue the package will not be enough to support the country, and that a nationwide lockdown may still hurt its economy.
“The fresh announcements related to cash transfers appear to be relatively modest at this stage,” said Aditi Nayar, an economist at ICRA, according to Reuters.
India’s growth fell to a 4.7% in October-December, its lowest in more than six years, and is likely to fall to 2.4% in January-March, Nayar said.
As of Friday, infection numbers in India have risen to nearly 900 and the death toll is 20, according to Johns Hopkins.
