FM fires second salvo: Free foodgrains for migrants, concessional loan for farmers

Firing a second salvo to limit COVID fallout, Finance Minister Nirmala Sitharaman on Thursday announced a Rs 3.16 lakh crore package comprising free foodgrains for migrant workers, Rs 2 lakh crore concessional credit to farmers and working capital for street vendors in a bid to help those hit hard by the nationwide lockdown.

Together with the Wednesday's Rs 5.94 lakh crore package that mostly comprised off-budget credit line and support to small businesses, shadow banks and electricity distribution companies, the government has unveiled over Rs 9 lakh crore plans out of the Rs 20 lakh crore package announced by Prime Minister Narendra Modi to heal Asia's third-largest economy that was seen hurtling towards its first full-year contraction in four decades.

 

Sitharaman said each of the eight crore migrant workers, who had toleave their workplaces after imposition of the lockdown on March 25, will get 5 kg grains and 1 kg pulses free for two months.

Also, 50 lakh street vendors who were rendered jobless as the government ordered stay-at-home would be given a working capital loan of Rs 10,000 each to restart businesses.

For farmers, she announced a Rs 2 lakh crore concessional credit through Kisan Credits Cards, benefiting as many as 2.5 crore farmers.

Besides, to meet post-Rabi crop and current Kharif crop requirement of farmers in May and June, the National Bank for Agriculture and Rural Development (NABARD) will provide Rs 30,000 crore additional emergency working capital funding to rural cooperative banks and regional rural banks.

She also announced a Rs 70,000 crore boost to the housing sector through a one-year extension of subsidised loan for affordable houses bought by the middle-income group with an annual income of Rs 6 lakh to Rs 18 lakh.

"Yes, there are people suffering. Yes we have noticed a lot of people are undergoing severe constraints, they are walking back to their homes," she said. "Prime Minister had requested (them to) please stay wherever you are but nevertheless emotions being what they are and concerns being what they are, we understand migrants moving. We will have to extend all benefits. That is what we are trying to do."

While the central government will bear the Rs 3,500 crore cost of giving free foodgrains and pluses, the state governments will be responsible for its implementation, identification of migrants and full distribution, she said.

Also to the benefit of migrant workers, the government plans to start inter-state portability of ration cards under the public distribution system (PDS) so as to allow them to use their cards anywhere to get benefits.

Affordable Rental Housing Complexes (ARHC) for migrant workers/ urban poor will be launched by converting government-funded housing in cities into such units, the minister said.

"This government is concerned about migrants. (It) touches all our hearts and see migrants with their families, children with their bags waking on the roads," she said adding the government is ready to help them reach their places by trains.

For small businesses, she announced a 2 per cent interest subvention under MUDRA-Shishu loans of up to Rs 50,000. This would cost the government Rs 1,500 crore.

For street vendors, the working capital loan would cost Rs 5,000 crore.

She also announced a Rs 6,000 crore employment push using Compensatory Afforestation Management and Planning Authority (CAMPA) funds.

Opposition Congress criticised the economic package as a "jumla package" saying it has so far way short of what the Prime Minister had promised and the entire press conference of the finance minister was classic display of "arrogance, ignorance, insensitivity".

Sitharaman said migrants who are neither under the national food law (NFSA) nor features in the list of state card beneficiaries will be provided 5 kg of grains per person and 1 kg chana per family per month for two months.

Alongside, technology will be used to enable them to access PDS (ration) from any fair price shop in India by March 2021.

Inter-state portability of ration cards has been introduced in 20 states and it will be extended to 67 crore beneficiaries in 23 states, covering 83 per cent of the PDS population, by August 2020. By March 2021, 100 per cent national portability will be achieved.

Sitharaman said small businesses under the MUDRA scheme have been disrupted the most by the coronavirus lockdown, which has also impacted their capacity to pay EMIs. To help them, the government will provide interest subvention of 2 per cent for prompt payees for a period of 12 months.

Stating that there is a need to create job opportunities, she said funds under CAMPA will be used by the state government for afforestation and plantation works, artificial regeneration, forest protection, and soil and moisture conservation works to createjob opportunities in urban, semi-urban and rural areas.

The Rs 30,000 crores additional emergency working capital funding for farmers is over and above Rs 90,000 crore provided by NABARD through normal refinance route this year. This will front-load on-tap facility to 33 state co-operative banks, 351 district co-operative banks and 43 regional rural banks (RRBs) and benefit around 3 crore farmers - mostly small and marginal.

She said a special drive will be undertaken to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards. Fishermen and animal husbandry farmers will also be included in this drive to provide them access to institutional credit at a concessional interest rate.

For the housing sector, the finance minister said the Credit Linked Subsidy Scheme for the middle-incomegroup is being extended by one year to March 21, 2020.

This would benefit 2.5 lakhs middle income families during 2020-21 and will lead to an investment of over Rs 70,000 crore in housing.