Much Higher Resources Needed to Help the Needy in Covid Times

Bharat Dogra

As more and more reports of people pushed deep into livelihood and hunger crisis due to prolonged lockout and related factors are coming to light, it is increasingly and strongly realized that huge resources need to be raised to help those in need in these extremely difficult times. According to estimates prepared by Jayati Ghosh, Prabhat Patnaik and Harsh Mander a plan is needed based on providing –

1. Ten kg. of entirely free grain (rice or wheat) per person per month for around 80 per cent of the population for a period of six months, estimated to cost Rs. 1,17,000 crore;

2. A cash transfer of Rs. 7500 per month for 80 per cent of households for 3 months, estimated to cost Rs. 4,36,800 crore;

Hence the total cost of this package is estimated to be Rs. 5,53,800 crore, or around 2.9 per cent of currently estimated GNP. (see article Humanitarian Emergency in the Indian Express, April 27, 2020).

Writing in the same newspaper Dr. Ashok Gulati (A Marshall Plan for East India) says that in contrast to the package of Rs. 1,70,000 crore (one crore=10 million) announced soon after the commencement of the lockout in mid-March which amounted to only 0.8 per cent of the GNP, India needs a much bigger relief-cum-stimulus package which should amount to at least 5 per cent of the GDP. He suggests that this should be focused on Eastern India to a significant extent, mainly the belt of eastern Uttar Pradesh, Bihar, Jharkhand, W. Bengal and Odisha which is likely to suffer the most due to the substantial loss of remittances sent by migrant workers. He suggests a heavy investment involving workers of this eastern belt to construct better infrastructure, better agri-markets and godowns, rural houses, primary health centres and schools.

Here it may be added that while the March package of the Union government was indeed valued at Rs. 1,70,000  crores in official announcement, almost half of this consisted of repackaging of already announced, committed or existing funds for weaker and vulnerable sections. Hence the actual commitment made then was actually a little less than Rs. 1,00,000 crore.

On April 25 as many as 50 young Indian Revenue Service (IRS) officers shared a document titled Fiscal Options and Responses to Covid-19  Epidemic (FORCE). In this document there were several useful suggestions, which can also help to reduce inequality, like raising highest slab rate 40 per cent for  income above Rs. one crore, or re-introduction of wealth tax for those with net wealth of Rs. 5 crore or more. Tax relief for sectors hit hard by COVID 19 was also suggested. Several of these suggestions were certainly worth considering. However, as reported in newspapers, the government instead of encouraging this initiative of its more enthusiastic and young officers announced a probe against the officers associated with bringing out this report.

Another very useful suggestion would be to reduce in a big way all wasteful expenditure so that more funds can be saved for meeting the needs of those who most need help.

In many ways both the Union government and the state governments need to raise resources and cut all wasteful expenditure so that the top priority basic needs of most vulnerable sections of the population can be met. Voluntary organizations and citizens’ groups should also contribute to this effort to the maximum extentpossible.

The writer is Honorary Convener, Save the Earth Now Campaign. His latest books are Man Over Machine and Earth without Borders. 

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Frontier
May 11, 2020