Introduction

The Government of India has been fairly proactive in the fight against Corona pandemic in India. PM Modi in his speech to the nation on 24^th March acknowledged the lack of wherewithal and facilities in India to tackle Corona virus as compared to the developed nations of Europe and United States, who are presently stretched beyond their limits to prevent Corona deaths. The best course option available with India is to prevent the virus from spreading into densely populated pockets of the country. Hence, very appropriately a 21 day lockdown has been imposed in the country starting 24-25^th March midnight to prevent the spread of the deadly virus.

The entire country is sitting fingers-crossed hoping that the virus will not find us and life returns to ‘near’ normal after this 21 day lockdown period is over. Understandably, the harvesting season of the rabi crop commences from 15-20 April onwards and if the government is not in a position to relax the lockdown by that date, then we will have a choice of dying from Corona or hunger because we will be unable to harvest food grains to feed 1.3 billion hungry mouths.

Financial Support Package Announced for the Vulnerable

In order to ensure that no one in the country goes hungry during these trying times, the Finance Minister Nirmala Sitharaman today announced a Rs 1.75-lakh-crore scheme to help the economically weaker sections of the society. The above said financial package, dubbed as The Prime Minister’s Gareeb Kalyan Scheme is divided under eight heads, which covers all sections of society, including pensioners, women and the specially-abled and migrant workers.

The major highlights of the scheme are as under:

• The underprivileged who are already receiving food grains under the National Food Security Act, will receive additional 5kg of wheat or rice and 1kg regional pulse free of cost for the next three months.
• All farmers under the Direct Cash Transfer scheme of yearly Rs 6000/-, will receive the first installment of Rs 2000/- by 01^st April.
• Besides, three crore widows, pensioners and the specially-abled from across the country would receive a one-time ex-gratia payment of Rs 1,000.
• Each of the 20 crore women Jan Dhan account holders will receive an ex gratia of Rs 500 per month for the next three months.
• Nearly 8.3 crore Below Poverty Line families will get free cooking gas cylinders for the next three months.
• Women self-help groups of Deen Dayal Upadhyay Yojana, who are eligible for collateral-free loans of up to Rs 10 lakh till now, will be eligible to now get up to Rs 20 lakh loans.
• All companies that have up to 100 employees and 90 per cent of these employees earn less than Rs 15,000 per month, the government will pay the provident fund share of both the employer and employee. The same will reduce the financial burden on the companies and the employees will have extra money in hand.
• Besides, the employees will be able to withdraw a non-refundable advance of up to 75% of their deposits or three months wage, whichever is less from the Employee Provident Fund.
• A District Minerals Fund has been created by the centre government to allow the state governments to use this central fund to help in testing and other measures to battle the Corona pandemic.
• Most importantly, the government also announced a special Rs 50 lakh medical insurance cover to the frontline workers who are risking their lives to avert the situation from reaching a crisis.

Previous Announcements by FM

The Finance Minister on 23^rd March had announced certain other relief measures for the companies and tax payers so that they could tide over the negative financial impact of the corona virus. The same are as follows:

• Deadline for filing of income tax and GST has been extended to 30^th June.
• Waiver of penalty, late fee and interest on GST has been announced to help the industry cope up with the huge cash crunch being faced by them owing to non production.
• Deferment of e-invoicing and some additional returns to be filed by companies announced earlier would allow businesses to resume their processes swiftly once normalcy returns.
• Owing to large-scale economic disruption many companies may default in their loan repayments. Hence, the FM, Mrs Sitharaman has announced that the threshold of loan default that could trigger insolvency proceedings against the company has been raised to Rs 1 crore from the existing Rs 1 lakh now.
• The government has waived a minimum balance fee on the savings bank account as well as allowed charge-free withdrawals from any bank ATM for the next three months. Also, charges for digital trade transactions for all trade finance consumers have been reduced.
• The mandatory requirement of holding meetings of the board of directors by companies has been relaxed for the next 60 days and also waived the fee for late filings during the moratorium period.

Conclusion

The steps taken by the government are appreciable and will provide some immediate respite to all sections of the society. The estimated cost of the 21 day COVID-19 lockdown in the country is being pegged at Rs 9 lakh crore or 4% of the GDP. The impact of the losses is bound to bring down the growth rate for the Financial Year 2021, which is now being suggested to remain in the range of 3.5 to 4 per cent. The worst effected sectors include the Aviation (most companies are at the verge of bankruptcy), Hospitality has shown a drop of 35%, Apparel/ Textile industry which exports one lakh crore worth of garment, mostly to Europe is in held-up mode, Consumer Durables and Electronic sales and imports from China have got disrupted and lastly, Poultry and Seafood demand has drastically gone down owing to unsubstantiated social media reports about meat being a major reason for the spread of Corona virus. Like always the most drastic effect will be on the unorganized, informal sector. As per last year’s economic survey 93% or 435 million workers are employed in the unorganised sector that generates 50.6% of the country’s Gross Domestic Product.

These workers who have no cushion for the rainy day will find it exceedingly difficult to survive if the pandemic goes beyond a level. Let us hope, as is being suggested by some reports, that the rising temperatures will reduce the spread of the virus and we can partially open up businesses so that life becomes sustainable. Personally, I feel that after learning many valuable lessons taught to us by Corona Virus we may be able to start looking at leading a life defined by a new normal by the third week of May 2020.