The Pradhan Mantri Garib Kalyan Yojana (PMGKY) was launched in the year 2016 by PM Narendra Modi along with the other provisions of Taxation Laws (Second Amendment) Act, 2016. It came into effect from 17th December 2016 under the Ministry of Finance.
The Union Finance Minister has announced Rs1.70 lakh crore relief package under the newly framed Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against CoronaVirus (COVID-19).
- As part of the lockdown to stem the spread of the deadly virus, the government has stopped public transport, airlines and construction work, bringing to a halt most economic activities and leaving millions of workers in the informal economy without a livelihood.
- The central government’s package comes a week after Kerala first announced a Rs 20,000-crore support for its people. Many states including Uttar Pradesh, Uttarakhand, Punjab, Telangana and Rajasthan followed suit.
Benefits of PM Garib Kalyan Package
To reduce the loss caused by the outbreak of Covid-19 in India, the Finance Minister launched the PM Garib Kalyan Package on March 26th 2020 for the BPL families.
Some of the benefits provided by the PM Garib Kalyan Package are as follows:
- An Insurance Cover of Rs. 50 Lakh
- Free Pulses for the next 3 months under PM Garib Kalyan Ann Yojana
- Benefit to farmers
- Free LPG cylinders to the BPL families
- To help the low wage earners in organised sectors
The latest announcement on PMGKY was made on 29th June 2020. Earlier on 26th March 2020, the government took an initiative towards the loss caused by the outbreak. The lockdown in the nation due to Coronavirus expected to cost the Indian Economy a cost of around 9 lakh crores.
Announcements made by the Finance Minister, Nirmala Sitharaman on 26th March 2020 are mentioned below:
- To provide an insurance cover of Rs 50 lakhs per health worker affected by COVID-19.
- To provide free resources of 5 kg wheat or rice and 1 kg of preferred pulses for 80 crore poor people for the next three months under the PM Garib Kalyan Ann Yojana.
- 20 crore Women Jan Dhan account holders will be provided Rs 500 per month for next three months.
- There will be an increase in MNREGA wage to Rs 202 per day to benefit 13.62 crore families.
The Central Government has given orders to State Governments to use the Building and Construction Workers Welfare Fund to provide relief to Construction Workers.
PM Modi in his speech on 30th June 2020 mentioned the extension of the PM Garib Kalyan Yojana till the end of November 2020. He also mentioned that in the last 3 months, Rs. 31,000 crore deposited in bank accounts of 20 crore poor families.
- Over 80 crore poor people are to be provided free food grains till November 2020 – 5kg of wheat/rice and 1 Kg of pulses per family.
- The extension of PMGKY is going to cost Rs.90,000 crore.
- Due to the outbreak of Covid-19 in India, the Finance Minister, on 26th March 2020, had announced a ₹1.7 lakh crore Gareeb Kalyan package to mitigate the loss faced by the poor due to the coronavirus lockdown.
- Earlier, the scheme was valid from December 16, 2016, to March 31, 2017, and later was extended till June 2020.
- The PMGKY provided an opportunity to declare the unaccounted wealth and black money in a confidential manner and avoid prosecution after paying a fine of 50% on the undisclosed income. An additional 25% of the undisclosed income is invested in the scheme which can be refunded after four years, without any interest.
Globally, many countries had announced stimulus packages involving 10-12% fiscal expansions. In comparison, this package is only about 0.75% of India’s GDP, which is marginal.
The Government should now turn its focus towards businesses that are running out of cash and may soon default on even salaries and statutory commitments if relief is not given.