Fiscal stimulus 2.0: Why cash support to migrant workers was aborted

The jump of Rs 40,000 crore in allotment to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is more or less what the government had planned at one stage to provide migrant workers as immediate relief, but gave up the idea because of operational difficulties. 

The plan for cash relief changed as the ground realities altered rapidly in the past two months. After the end of the first lockdown on April 14, it had become clear to the Centre the migrant workers, cooped up without job, would need a special support programme. 

The sum was debated and it became clear it would have to be similar in scale to the support given under the Pradhan Mantri (PM) Garib Kalyan Yojana (PMGKY).

This was being debated even as the contours of the economic package were being developed simultaneously. 

The challenge for the finance ministry was, however, how to reach the workers with the benefit. While it was obvious that cash support had to reach them through their bank accounts, it was a problem because there was no countrywide data of the number of migrant workers. 

“The database was not the same as the one available for PMGKY, so it was not possible to seed the same bank accounts indiscriminately,” said a top source aware of the developments. 

The Centre began to reach out to the state governments about the numbers and names of the workers who were quarantined in camps. It was a massive exercise as the government found.

Meanwhile, the clamour from the workers to return home had intensified. Hundreds of workers had filed out of camps to reach Bandra railway station in Mumbai in late April. 

Similar disturbances happened in other cities such as Surat. 

The central government had to give permission to the Ministry of Railways to begin the nationwide roll-out of Shramik Specials to take the migrants home with the assistance of state governments.  The trains began to operate from May 1.

Once the migrant workers began to troop out of camps in the subsequent days, the finance ministry found the process of enumeration of the stranded workers had to be cancelled.

“Our problem was also that we could not make it public to the workers and make them wait. It was also not a humane option, given what they had gone through,” the source said. Yet the consensus within the government was that the relief meant for them must reach the migrant workers. As government managers gathered to work out the contours of the economic package, it became apparent that the workers were overwhelmingly bound for rural areas.

It was then clear that the best way to send the money to them would be through the MGNREGS. The unemployed workers would turn up for jobs under the scheme and so it made sense to top up the allotment to the rural works programme. This is what Finance Minister Nirmala Sitharaman announced as part of the final part of the five-day-long economic package.