Govt likely to consider suggestions for cash transfer to unemployed, migrant workers: Niti Aayog V-C

The government could consider suggestions for direct transfer of cash to unemployed workers, including migrant workers, to compensate them for loss of livelihood in the wake of the 21-day lockdown to curb spreading of coronavirus infections, Niti Aayog Vice Chairman Rajiv Kumar said on Monday.

Following the nationwide lockdown, which will be in place till April 14, thousands of migrant workers from Uttar Pradesh, Bihar and other states have started returning back to their home states from various cities, including Delhi and Mumbai.

Kumar said the Centre and state governments have made big arrangements for migrant workers in different parts of the country where their sustenance is taken care of. The central government has also received suggestions for direct cash transfer to unemployed workers, he said.

"As far as the loss of cash income (of migrant workers due to the countrywide lockdown) is concerned, I think the government may consider at some stage giving them cash through the Direct Benefit Transfer (DBT) scheme to compensate them for loss of employment on account of the 21-day lockdown," Kumar told PTI in an interview.

The option of direct cash transfer might be considered for unemployed workers, including migrant workers, he noted. Even though most migrant workers have mobile phones and bank accounts, Kumar said it would still be difficult to transfer cash to them because they are in an unorganised segment.

"Nonetheless, some ways can be found through industry organisations, through employer organisations to identify them and compensate them to some extent for loss of their cash incomes," Kumar said.

According to him, there are two negative impacts due to the lockdown on migrant workers. "One is sustenance, which means food and shelter, and second is the loss of cash income. The first is already being taken care of and the second, I think, as and when need arises will be taken care of by the Centre and state governments working together," he said.

Last week, the government announced a Rs 1.7 lakh crore stimulus package that includes free foodgrains and cooking gas to poor people for three months as well as cash doles to women and poor senior citizens to alleviate the financial impact due to the lockdown.

Asked whether the government's relief package is enough as pointed out by many experts,Kumar said that most of these experts are not taking into account of twin packages - the fiscal and the monetary - that has been announced.

"They are only talking about the fiscal package. If you include the two together, the size of package comes to more than Rs 4.5 trillion and that is quite large," he said.

Moreover, Kumar said the finance minister has made it very clear that India has adopted a graded response approach to the situation and that just means the policy response will come as the situation demand.

"So if a further policy measure or an stimulus is necessary, then the government will make sure. it comes up with one .Graded response has been adopted to make sure that we don't go overboard and try make balance between fiscal prudance and stimulus necessary," the Niti Aayog vice chairman emphasised.

Asked how relief package will be funded, Kumar said he does not think this is a time to talk about fiscal balances or talk about where this money will come from.

"The government as you know has many options where it can raise resources. One of the options, I think which already has been exercised by the Prime Minister is to ask for private donations, which will come in large quantities," he said.

Citing example of 1965 war, when then Prime Minister Lal Bahadur Shastri had asked for donation both in cash and in gold, Kumar said, "Similar things can happen now. Our private economy is very strong and government can always take exceptional measures to get the help of private economy to fund its critically needed public initiatives."

Talking about impact of the coronavirus pandemic on India's economic growth, he said the impact will be of course negative because entire economic activity has come to a halt for at least three weeks and the impact may also linger for a longer time.

"At this stage, to make any forecast or any overall assessment of pandemic is full of uncertainty. It is clear, however, that the first quarter of the 2020-21 will be quite significantly impacted.

"Because all the service sectors, which have had to be closed down, will lose all revenues for at least three weeks if not longer. This could bring about these sectors growth to near zero as far as I can see," Kumar emphasised. The Niti Aayog vice chairman, however, noted that it will be foolhardy to predict economic growth rate for fiscal 2020-21.

"We never know how quickly the economy will recover after the first quarter when the coronavirus is behind us. So, it is not a good idea to forecast at this stage," he said.

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