Economic Measures by Indian Finance Ministry to cope with Coronavirus

The Finance Ministry is working on a second relief package for the hard-hit Indian economy by the coronavirus outbreak and the 21-day nationwide lockdown imposed to curb the contagion, sources said.

At the end of March, the government announced Rs 1.70 lakh crore relief package in the form of food grains and cash transfers for the poor and vulnerable section of the society to help them deal with the hardships caused by the lockdown.

Now, the government is working on a stimulus to be given to hard-hit sectors of the economy after the lockdown is lifted, sources said, adding, an announcement is expected in the next few days depending on the severity of the pandemic.

Besides, further relief measures are being worked upon to mitigate the hardships faced by citizens, especially the poor and vulnerable section of the society, sources added.


The finance ministry along with the empowered group constituted by the Prime Minister’s Office (PMO) is working tirelessly on this aspect, sources said. Last week, the PMO constituted a seven-member empowered group headed by Economic Affairs Secretary Atanu Chakraborty, who is monitoring the situation on a daily basis.

The empowered group is not only looking at the pain points of the economy but also the distress and misery being faced by a large section of the society who have been rendered jobless due to the outbreak.

Besides Chakraborty, the other members of the panel are Expenditure Secretary T V Somnathan, Labour Secretary Hiralal Samariya, Rural Development Secretary Rajesh Bhushan, Department of Financial Services Additional Secretary Pankaj Jain, Joint Secretary in Prime Minister’s Office Arvind Shrivastava and Deputy Secretary in the Cabinet Secretariat Amrapali Kata. The panel is also looking at rural distress.

According to sources, the group is looking at the stress in various sectors including MSME, hospitality, civil aviation, agriculture, and allied sector and based on the inputs working on the stimulus package.

The comprehensive package once prepared will be vetted by the Union Cabinet headed by Prime Minister Narendra Modi and the announcement would be made by Finance Minister Nirmala Sitharaman, the source added.

The announcement is expected to be made towards the end of lockdown so that the industry can be put on a track and the economy can be reinvigorated as soon as possible.

Meanwhile, the Union Cabinet on Monday approved a 30 percent reduction in salary and allowances of Members of Parliament for one year to fight against COVID-19.

President, Vice President, and Governors voluntarily decided to take a pay cut as a gesture towards concerted effort to contain the spread of the deadly virus.

At the same time, the government has decided to suspend MPLADS and funds would be directed towards improving medical infrastructure. An MP gets Rs 5 crore every year as part of the Members of Parliament Local Area Development Scheme (MPLADS).


Finance Minister Nirmala Sitharaman on 26th March announced a relief package to help fight the COVID-19 outbreak. She had said the relief package was aimed at shielding the poor during the ongoing COVID-19 pandemic.

She had also added that the economic relief package will focus primarily on migrant laborers and daily wage laborers. The package included a mix of food security and direct cash transfer benefits which shield poor families during the lockdown.

PMGKY Package

Under the Pradhan Mantri Gareeb Kalyan Ann Yojna (PMGKY) which is a part of the relief package, at least 80 crore poor people will be covered.

Under the scheme, an additional five kilos of rice/wheat will be given to 80 crore individuals — over the 5 kilos, they already get — along with a one-kilo pulse per household for a period of three months. The government will spend Rs 45,000 crore for undertaking these measures.

She had also announced that there will be Rs 50 lakh insurance cover for each healthcare worker for three months.

“Safai karamcharis, ward-boys, nurses, paramedics, technicians, doctors and specialists, and other health would be covered by a special insurance scheme. Any health professional who while treating COVID-19 patients meets with some accident, then he/she would be compensated with an amount of Rs 50 lakh under the scheme,”

stated the government press releases.


Nirmala Sitharaman had also announced direct cash transfers for a large number of affected people including senior citizens, widows, farmers and daily wage laborers.

“8.69 crore farmers to be immediately benefited through direct cash transfers under Kisan Samman Nidhi. Installment of Rs 2,000 in the first week of April will be transferred,” Sitharaman said.

Wages under MNREGA will also be increased by Rs 2000 per worker on average as additional income to help daily wage laborers.

The finance minister had also announced that three crore senior citizens, persons with disabilities (Divyangs) and widows will get a one-time additional amount of Rs 1,000 in two installments, to be given through DBT over a period of three months.

She also had announced that 20 crore Jan Dhan women account holders will be covered under the relief package and a compensation of Rs 500 per month for the next three months.

Sitharmanan had further announced that BPL families will get free cylinders for three months under the Ujjawala scheme as well. Meanwhile, collateral-free loans had been doubled to Rs 20 Lakh for women self-help groups under the Deen Dayal National Livelihood Mission. It would help seven crore women.

In addition, the government will bear the cost of EPF contribution of both employer and employee (24 percent) for the next three months. However, this is only for those establishments which have up to 100 employees and 90 percent of them earn less than Rs 15,000.

This is like to benefit around 4.8 crore employees, Sitharaman said. “Govt ready to amend the regulation of EPF due to this pandemic so that workers can draw up to 75 percent non-refundable advance from credit in PF account or 3 months salary, whichever is lower,” Sitharaman added,

So, DBT cash transfers and benefits will broadly cover farmers, MNREGA workers, poor widows, pensioners and Divyangs, Jan Dhan Yojna accounts, BPL families under the Ujjawala scheme, self-help women groups, EPFO organized workers, construction workers, and district mineral workers.

Moving on, Sitharaman also announced that for the welfare of building and construction workers, the central government has passed orders to states to use funds worth Rs 31,000 crore to provide relief. This fund is likely to be used to augment medical testing, screening and providing better healthcare facilities, said Sitharaman.

The relief package is likely to help in cushioning the financial losses caused by the countrywide lockdown to contain the COVID-19 outbreak.


Some days before the announcement of the relief package, on 24th March Ms. Sitharaman announced an extension of some deadlines and reduced compliance burdens on companies.

She said the government has extended the income tax filing for the financial year 2018-19 to June 30, 2020. The finance minister also extended the deadline for the Aadhaar-PAN card linking to June 30.

As far as other measures are concerned, a total waiver of debit card usage charges which apply for transaction at a different bank’s ATM. The minimum balance criteria for bank accounts was also waived off for a period of three months.

“Debit cardholders who withdraw cash from any bank’s ATM can do it free of charge for the next 3 months. Also, a complete waiver of minimum balance charges for a savings bank account,” she said. Several compliance burdens were also relaxed for companies that have been forced to shut down key business operations.