Terming the package announced by the central government as insufficient, experts have once again stressed on direct transfer of money to the poor as a better way to assist them. “Rs 500 given by the union government to Below Poverty Line (BPL) people is negligible. Today, banks are ready to give loans, but nobody is willing to avail it. That’s why they are parking that money with the Reserve Bank of India. This shows that the priority should not be investment, but to create demand. Internationally renowned economists are suggesting the same. But the Narendra Modi government is not following this advice,” policy researcher, economist and activist Milind Murugkar said.
India’s former chief statistician Pronab Sen calculated that India has 6.50 crore businessmen or entrepreneurs. Out of this, maximum 50 lakh have employed 10 or more employees. The remaining six crore are run by one or two persons, like family-run enterprises or self-employed enterprises. “The government should have helped these six crore enterprises with financial support and not with loans. Economist Parikshit Ghosh has put forward good statistics in support for direct cash transfer to the poor. According to him, due to the Food Safety Act, 66 per cent of the population have ration cards. The central government should have supplied Rs 5,000 per month for the next three months to those who have ration cards under the Food Safety Act. This would have cost only three per cent of the GDP as per the Ghosh’s calculations. This would have saved labourers and the poor from hardships they are facing now. Had this been around elections, the Modi government would have certainly done this,” he said.
Increase allocation of EGS
Addressing a webinar organised by Vatavaran Foundation, amongst others, well-known activist Nikhil Dey demanded that out of the 20 lakh crore, 2 lakh crore should be spent on the Employment Guarantee Scheme (EGS). Finance Minister Nirmala Seetharaman has announced an additional 40,000 crore allocation for the Mahatma Gandhi National Employment Guarantee Scheme (MGNERGS). With this, the central government will now spend a total of 1 lakh crore on MGNERGS.
“In the current scenario, EGS work should not be extended to urban areas as well. Those who work in EGS should be covered by health insurance. Senior citizens should get pension in the EGS scheme and the employment allowance should be given to workers at their workplace,” Dey, founder of Majdoor Kisan Shakti Sanghtan, said.
“Due to the lockdown, labourers lost their employment for six weeks. This loss should be immediately compensated through MGNERGS,” demanded Ashwini Kulkarni, activist and founder of Pragati Abhiyan, said.
“Labourers in the cities of Maharashtra have now gone back to their villages. The EGS scheme can help them survive the lockdown. In Maharashtra, the centre’s and state’s EGS acts are being implemented. Therefore, it’s possible to provide work for 365 days. If there is a political will, the EGS can be implemented successfully. EGS work is currently going on only in tribal areas,” Kulkarni suggested.
Retail industry demands working capital
While expressing reservations about the package announced by the central government, the retail industry has demanded working capital. The package will not help us immediately and may push 46 million people to joblessness, the Retailers Association has warned.
“Retailers need working capital in their hands to retain employment. Lack of support will result in closure of businesses and will jeopardise the livelihoods and jobs of 46 million direct employees, out of which 20 million work in non-essential retail. With no income and zero support from the government, the industry doesn’t have the ability to support them. This will lead to a massive slowdown in consumption that will further harm the economy and the country,” said Kumar Rajgopalan, chief executive officer of Retailers Association of India(RAI).
Some earlier measures like reduction in TDS rates for payments or 2 per cent reduction each in the EPF contribution of both the employer and employee are minor measures that fail to provide the monetary support needed to keep a business functioning, he added.
“The RAI is of the view that the steps taken under the Atmanirbhar Bharat economic stimulus will help the country in the long term, but the emergent issues facing the retail industry have not been addressed. The retail industry, which contributes around 40 per cent to India’s consumption and 10 per cent to India’s Gross Domestic Product (GDP), is severely stressed. What retailers needed was wage support; moratorium for payment of principal and interests and support in the form of working capital. This is critical for retail to survive. Even the relief measures offered to MSMEs by the government do not help retailers, as retail is not covered under the MSME sector,” he stressed.