Economic Survey 2022: Govt's safety-net to cushion Covid-19 distress

The last two years have been particularly challenging for policy-making around the world due to the COVID-19 pandemic. Uncertainties in global as well as domestic economies ensued amid subsequent waves, travel restrictions, supply-chain disruptions and, more recently, global inflation.

The Government of India opted for a careful mix of emergency support and economic policy actions to provide a cushion against pandemic induced shocks while flexibly adapting to an evolving situation, revealed the Economic Survey 2022 tabled by Finance Minister Nirmala Sitharaman on Monday.

The government put in place economic safety nets comprising world’s largest free food program, direct cash transfers and relief measures for small businesses.

The government opted for a “Barbell Strategy” that combined a bouquet of safety-nets to cushion the impact on vulnerable sections of society/business, with a flexible policy response based on a Bayesian updating of information. Similar to the last year’s Economic Survey, this is a common strategy used in financial markets to deal with extreme uncertainty.

Many of the government’s safety net provisions continued during the second wave and have been extended further as appropriate. This was also combined with a rapid ramp-up of the vaccination programme. The Reserve Bank of India also provided monetary support to the economy.

Here’s the list of safety nets used to cushion vulnerable sections from Covid-19 distress:

Cash Transfers

• Rs 500/month for 3 months to women Jan Dhan Account holders
• Rs 30,944 crore released to 20.64 crore women beneficiaries
• Rs 1,000 to vulnerable sections (widows, Divyangs, elderly)
• Rs 2,814 crore released covering 2.82 crore beneficiaries
• Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) - Rs 6,000/- per year in three instalments
• Rs 1.8 lakh crore transferred to more than 10 crore farmer families as on 1.1.2022, since Feb 2019, i.e., 6 instalments since COVID-19.

Food Security

• Pradhan Mantri Garib Kalyan Anna Yojana - Additional free-of-cost food grains to 80 Crore National Food Security Act (NFSA) beneficiaries @ 5 kg per person per month, over and above the regular monthly NFSA foodgrains
• One Nation One Ration Card to ensure PDS benefit for people in transit, especially migrant workers.
• Enabled in 34 States/UTs by August 2021 covering 94.3 per cent National Food Security Act population
• 24.32 crore portability transactions carried out between 1.4.2020 and 30.9.2021
• Cooking gas cylinders under Ujjawala - 3 free cylinders to 8 crore beneficiaries for April to June 2020.
• First refill and hotplate free under Ujjwala 2.0 (launched 10.8.2021) with simpler procedures

Employment

• Pradhan Mantri Garib Kalyan Rojgar Abhiyaan (PM-GKRA) for immediate employment & livelihood opportunities to returnee migrant workers across 6 States of Bihar, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh
• Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) - 2020-21 employment provided to 11.2 crore persons generating 389.2 crore person days. Funds of Rs 1,11,171 crore released.
• MGNREGS wage increased by Rs 20 over the wage rate of 2019-20. Wage rate revised w.e.f. 1.4.2020 to benefit nearly 13.62 crore families
• Contribution of 12 per cent employer and 12 per cent employee’s share under Employees Provident Fund (EPF) for 6 months for establishments with upto 100 employees with 90 per cent earning less than Rs 15,000/-
• Aatmanirbhar Bharat Rojgar Yojana (ABRY) to reduce the financial burden of the employers and encourages them to hire more workers, implemented by EPFO. As on 20.11.2021, benefit provided to 39.43 lakh beneficiaries through 1.15 lakh establishments

Housing

Pradhan Mantri Awas Yojana – Gramin (PMAY-G)

• 2020- 21: 33.99 lakh houses completed
• 2021-22 (as on 25.11.21): 26.20 lakh houses completed

Pradhan Mantri Awas Yojana – Urban (PMAY-U)

• PMAY-U 2020-21: 14.56 lakh houses completed
• PMAY-U 2021-22: 4.49 lakh houses completed (upto Dec-21)

Skill Development

• Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) and Rural Self Employment Training Institutes (RSETIs) - skill development programmes for rural poor youth.
• DDU-GKY 2020-21: 38,289 candidates trained and 49,563 candidates placed in jobs. DDU-GKY 2021-22 (till Oct’21): 14,568 candidates trained and 21,369 candidates placed in jobs.
• RSETI 2020-21: 207712 candidates trained and 138537 candidates settled. RSETI 2021-22 (as on 30.10.2021): 114640 candidates trained and 61546 candidates settled
• Fresh skilling and upskilling of the returnee migrant workers under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) covering 6 states. 1.24 lakh migrant workers trained as on 21.11.2021

MSMEs

• 6-month moratorium and deferment of interest for 1.3.2020 to 31.8.2020 for all term loans by RBI
• Restructuring of MSME default loans – Aug 2020 and May 2021 Schemes of RBI
• Aggregate restructured portfolio of Rs 78,591 crore as on 12.11.2021 by SCBs
• Resolution/restructuring by PSBs in 9.8 lakh MSME accounts amounting to Rs 58,524 crore
• Emergency Credit Line Guarantee Scheme – 100 per cent guarantee for additional funding of up to Rs 4.5 lakh crore to businesses (esp. MSMEs) for COVID affected sectors. Rs 2.28 lakh crore disbursed to 95.2 lakh borrowers, impacting 5.45 crore employees as on 19.11.2021. 66 per cent of guarantee amount disbursed to MSMEs

Credit Guarantee Scheme (CGS) for MSMEs

• Credit / Margin Money provided 2020-21: Rs 36,899 crore
• 2021-22: Rs 22,959 crore (as on 30.11.2021)

Credit​​​​

• Suspension of initiation of corporate insolvency process under Insolvency and Bankruptcy Code for 1 year, and increasing minimum threshold from Rs 1 lakh to 1 crore
• Term Liquidity Facility of Rs 50,000 crore for Emergency Health Services by RBI up to 31.3.2022
• Credit Guarantee Scheme to Micro Finance Institutions (MFIs) for on- lending
• Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs, HFCs and MFIs for fresh lending to MSMEs & individuals
• Special Long Term Repo Operations for Small Finance Banks available till 31.10.2021
• Lending by Small Finance Banks (SFBs) to MFIs for on-lending to be classified as priority sector lending up to 31.3.2022
• Rs 30,000 crore Additional Emergency Working Capital Funding for farmers through NABARD. Rs 25,000 crore disbursed as on 25.9.2020. Balance Rs 5,000 crore allocated to NABARD by RBI for smaller NBFCs and NBFC-MFIs.
• Nationwide Credit Outreach Programme launched on 16.10.2021
• Kisan Credit Cards Special Drive- Rs 2 lakh crore Concessional credit boost to 2.5 crore farmers. More than 1.5 crore KCCs issued with credit limit of Rs 1.35 lakh crore
• PM SVANidhi Scheme to provide working capital loan to urban street vendors to resume their businesses
• Credit worth Rs 3,054 crore to 30.2 lakh street vendors as on 30.11.2021

Self-Help groups (SHGs)

• Collateral free lending limit increased from Rs 10 lakhs to Rs 20 lakhs for 63 lakh women SHGs, who supported 6.85 crore households.

Deendayal Antyodaya Yojana

• National Rural Livelihoods Mission (DAY-NRLM) to reduce poverty by organizing the rural poor women into Self Help Groups (SHGs).
• 2020-21: loans worth Rs 84,143 crores disbursed to SHGs.
• 2021-22 (till September 2021): 21.6 lakh SHGs credit linked with Rs 43,093 crores.
• Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs. As on 30.9.2020, 39 proposals approved involving Rs 11,120 crore - Rs 7,227 crore disbursed. Scheme closed.
• Rs 1.1 lakh crore loan guarantee scheme for COVID affected sectors – health infrastructure, tourism, etc. Applicable till 31.03.2022, or till Rs 50,000 crore is sanctioned, whichever is earlier.