Thread by @anilnahata

#ReliefPackage for Covid19 Challenge by Central Govt. Does it address the issues at hand? My Analysis.

From what I am gathering I think this Package would have been a half decent package for general economy stimulation (instead of corporate rate cut last year, this would have been more useful.) My views are not going to be very popular but possibly worth a read.

When we talk about a package for Corona - it should have met certain targets. What are these? There would be many but key would be (in no particular order):

1. Addressing loss of income for daily wagers (urban craftsman and self-employed in particular) - so that they stay put where they are (have food to eat and money to pay rent) not move back to their villages and carry virus with them.

2. Ensure small business (and maybe large businesses as well) do not fire people, make drastic pay cuts and pay salaries so that the salaried (at the lower end of pay-scale more importantly) are atleast ring-fenced.

3. Ensure small business (all business in general, but SME in particular) do not go under and can survive this.
4. Ensure big and large business stay solvent and don’t go into bankruptcy primarily due to stoppage of business due to Corona.

5. Ensuring food security to all (including rural poor, farmers etc etc)
6. Making money available for Facilities, equipment, testing and treatment of Corona.

1. Addressing loss of income for daily wagers -Not really. Various state govt have said something for construction workers as has FM. Some like UP has said for daily laborer’s too (but amount is too meagre to make any meaningful impact).

But doesn't really address. Drivers, Maids, Electricians, Plumbers, Masons, Carpenters, barbers, tailors, handyman, hawkers, waiters, valets, beggars (yeah even they need money to eat) etc. etc. Anything about any of them?

2. Ensure small business do not fire people - Zilch -other than plea to the employers to be kind hearted. Paying them 33-50% of last 12-month average salary bill for the next 3 months under the condition no one is fired and no reduction in pay,would have been useful.

Ensure small business survive - hreshold of 1 lakh raised to 1 Crores for triggering of insolvency proceedings for SMEs. Really? 1 lakh is an amount which would have made sense in 1980's. Nothing here.

Ensure big and large business stay solvent -Again, nothing much to my knowledge, other than some meaningless stuff on income tax return of FY 18-19 extended beyond March (really!) and GST Annual return filing to June and relaxations on board meeting.

No concrete measure for stay of default if loan repayment missed, no easier availability of cash to pay salaries if cash flow is constrained etc. No forbearance on interest payments etc. Nothing for stressed sectors such as airlines or tourism

5. Ensuring food security to all (including rural poor, farmers etc. etc.) - Lots of announcement which address this. Except for many people in Sr 1 - it should be more than adequate to address literally everyone else. Extremely Positive and Welcome - well done on this account.

6. Making money available for Facilities, equipment, testing and treatment of Corona - Grey area. - Utilize the funds available under the district mineral fund - now what is this? Is mineral fund available everywhere - in equal measure? Does Delhi have it?

Giving at a calculation of Rs.200 per citizen to every state would have been simpler and somewhat equitable. With 135 Crore people it would be a bill of 27000 crores. it could have come with a condition that underutilized amount will have to be returned after 3 months. Whatever.

Another thing that was allowed earlier was MPLAD fund to be used. That could be around 4000 crores, if all MP's were to use 100% for this purpose.
Insurance cover for health workers exposed to Corona is extremely positive and welcome step.

In conclusion, besides the fact that these measures are hugely delayed (hugely is in context – a two-week delay when the count of virus impacted doubles every week, is huge), it only partially addresses the challenges thrown by Corona virus on various constituents.

India, is not a rich nation and even with the best of intent, we are resource constrained to take measures beyond a point. Yet the delay in bringing whatever resource we have to the war is unpardonable.