IAS Gyan

Daily News Analysis

DAILY NEWS ANALYSIS 27 MARCH

27th March, 2020

POLITY

Explained: Unpacking the Garib Kalyan package

For economic agents – particularly poor households and small businesses – it is a crisis of liquidity.

Pradhan Mantri Garib Kalyan Yojana:

 

Pulses:

-       To ensure adequate availability of protein to all the above mentioned individuals, 1 kg per family, would be provided pulses according to regional preferences for next three months.

-       These pulses would be provided free of cost by the Government of India.

PM Garib Kalyan Ann Yojana

-       Government of India would not allow anybody, especially any poor family, to suffer because of non-availability of food grains due to disruption in the next three months.

-       80 crores individuals, i.e., roughly two-thirds of India’s population would be covered under this scheme.

-       Each one of them would be provided double of their current entitlement over next three months. 

-       This additionality would be free of cost.

Insurance scheme for health workers fighting COVID-19 in Government Hospitals and Health Care Centers

-       Safai karamcharis, ward-boys, nurses, ASHA workers, paramedics, technicians, doctors and specialists and other health workers would be covered by a Special insurance Scheme.

-       Any health professional, who while treating Covid-19 patients, meet with some accident, then he/she would be compensated with an amount of Rs 50 lakh under the scheme.

-       All government health centers, wellness centers and hospitals of Centre as well as States would be covered under this scheme approximately 22-lakh health workers would be provided insurance cover to fight this pandemic.

Benefit to farmers:

-       The first installment of Rs 2,000 due in 2020-21 will be front-loaded and paid in April 2020 itself under the PM KISAN Yojana.

-       It would cover 8.7 crores farmers

Help to Poor:

-       A total of 20.40 crores PMJDY women account-holders would be given an ex-gratia of Rs 500 per month for next three months.

Gas cylinders:

-       Under PM Garib Kalyan Yojana, gas cylinders, free of cost, would be provided to 8 crores poor families for the next three months.

Help to low wage earners in organized sectors:

-       Wage-earners below Rs 15,000 per month in businesses having less than 100 workers are at risk of losing their employment.

-       Under this package, government proposes to pay 24 percent of their monthly wages into their PF accounts for next three months.

-       This would prevent disruption in their employment. 

Support for senior citizens (above 60 years), widows and Divyang:

-       There are around 3 crores aged widows and people in Divyang category who are vulnerable due to economic disruption caused by COVID-19.

-       Government will give them Rs 1,000 to tide over difficulties during next three months.

MNREGA

-       Under PM Garib Kalyan Yojana, MNREGA wages would be increased by Rs 20 with effect from 1 April 2020. Wage increase under MNREGA will provide an additional Rs 2,000 benefit annually to a worker.

-       This will benefit approximately 13.62 crores families.

Self-Help groups:

-       Women organized through 63 lakhs Self Help Groups (SHGs) support 6.85 crores households.

-       Limit of collateral free lending would be increased from Rs 10 to Rs 20 lakhs.

Organized sector:

-       Employees’ Provident Fund Regulations will be amended to include Pandemic as the reason to allow non-refundable advance of 75 percent of the amount or three months of the wages, whichever is lower, from their accounts.

-       Families of four crores workers registered under EPF can take benefit of this window.

Building and Other Construction Workers Welfare Fund:

-       Welfare Fund for Building and Other Constructions Workers has been created under a Central Government Act.

-       There are around 3.5 crores registered workers in the Fund.

-       State Governments will be given directions to utilize this fund to provide assistance and support to these workers to protect them against economic disruptions.

District Mineral Fund

-       The State Government will be asked to utilize the funds available under District Mineral Fund (DMF) for supplementing and augmenting facilities of medical testing, screening and other requirements in connection with preventing the spread of COVID-19 pandemic as well as treating the patients affected with this pandemic.

 Effectiveness of the package:

-       The doubling of entitlement, effective for the next three months with the extra grain coming free will practically meet the family’s entire cereal requirement.

-       These poor or lower middle class sections, impacted most by the lockdown, will no longer need to buy any wheat or rice from the market.

-       Given that Food Cooperation of India and the National Agricultural Cooperative Marketing Federation of India are now holding some 77.6 mt of cereals (3.5 times more than required) and 2.2 mt of pulses respectively, this is also an effective way to dispose of excess stocks.

-       Organized sector benefits are aimed at reducing the monetary strain on small firms in the organized sector that may feel compelled to fire employees given the mounting financial strain.

Challenges/Concerns:

-       Increase in MGNREGA payment will not improve the conditions in lockdown because there is little scope to undertake MNREGA works.

-       Farmers are already receiving an annual income support of Rs 6,000 under this scheme, with the first installment payment of Rs 2,000 for 2020-21 anyway due in April. There’s no additional financial implication here.

-       Rs. 500 transfer to women Jan Dhan account will not recompensate losses due to lockdown.

-       The package does not address the issue of liquidity, which is the need of the hour.

-       There is no evidence that the government has a plan for unorganized sector workers such as dhobis, rickshaw pullers, barbers, rural laborers, etc, even if they are registered with state governments. 

-       Even the money for construction workers does not require the government to borrow extra. The corpus of the fund actually comes from a 1 per cent cess on the cost of construction and collected by states and UTs, as mandated under the Building and Other Construction Workers’ Welfare Cess Act, 1996. 

Challenges of Implementation:

-       Many construction workers and laborers are struggling to reach their homes. To receive help, they will need to have been registered in a particular state.

-       There is little ability of the government to locate and deliver support to the migrant workers.

-       Onus for paying unemployment allowance to MGNREGA workers under the Act is on the state governments, there remain concerns if the state governments would make the necessary budgetary provision.

-       It is time for states to learn from the experience of Kerala and other States, which have universalized their social security programmes to ensure no deserving family, is excluded.

Reference: https://www.thehindu.com/business/Economy/17-lakh-cr-package-with-doubled-food-rations-cash-transfers-for-poor/article31172100.ece

SOCIETY

Speed at which virus is spreading is shocking, says researcher

According to a researcher, who is currently the director of Care Health Diagnostic Center, Chennai, one of the reasons for the spread of COVID-19 at a shocking pace is the presence of spike protein in the virus and its affinity to ACE2 receptors in human cells.

-       Explaining that while the synthesizing of RNAs happened in most organisms through an enzyme called DNA-directed RNA polymerase, it happened in coronaviruses (similar to few other viruses) through RNA-dependent RNA polymerase, since they are single-stranded RNA viruses that lacked DNAs.

-       She stated that the speed at which SARS-CoV-2 is spreading, in comparison to the strains that caused SARS (Severe acute respiratory syndrome) and MERS Middle East respiratory syndrome-related corona virus)(, is shocking.

-       According to her, one of the reasons was the presence of the spike protein in the virus and its affinity to the ACE2 receptors in human cells.

-       “Since there is a strong binding with the ACE2 receptors, the virus is able to infect and multiply even with a small number of them entering the human body,”.

Reference: https://www.thehindu.com/todays-paper/tp-national/tp-andhrapradesh/speed-at-which-virus-is-spreading-is-shocking-says-researcher/article31177738.ece

INTERNATIONAL RELATIONS

G20 commits $5 trillion

The G20 countries committed to inject more than $5 trillion into the global economy and contribute to the COVID-19 solidarity response fund led by the WHO.

About G20:

-       ​​​​​​​​​​​​​​​The G20 is the premier forum for international economic cooperation.

-       It gathers the leaders of the largest economies of the world to discuss financial and socioeconomic issues.

-       Collectively, G20 members represent around 80% of the world’s economic output, two-thirds of global population and three-quarters of international trade. 

History of G20:

-       Originated in 1999 at the level of Finance Ministers and Central Bank Governors.

-       The G20 gathered for high-level discussions on macro-financial issues.

-       In the wake of the 2008 global financial crisis, the G20 was elevated to include the leaders of member countries.

-       The first G20 Leaders’ Summit took place in Washington D.C. in November 2008.

Working of G20:

-       ​​The presidency of the G20 rotates between member countries every year.

-       The presidency plays a leading role in setting the agenda and organizing the Leaders’ Summit, which is attended by the G20 Heads of State or Government.

-        At the government level, the G20 work is organized around the Finance and Sherpa Tracks, while civil society assembles through Engagement Groups.​​

G20 Participants:

-       ​​​​​​​​​​​​The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico,  â€‹Republic o​f Korea,​Russia, Saudi Arabia, South Africa, ​​​Turkey, the United Kingdom, the United States and the European Union (EU).

-       ​​In addition to the G20 members, other countries are invited to participate. Spain is a permanent guest invitee to the G20 meetings.

Explained: What’s in the US’s historic $2.2 trillion coronavirus stimulus package?

The package intends to respond to the corona virus pandemic and provide direct payments and jobless benefits for individuals, money for states and a huge bailout fund for businesses.

Purpose of the Package:

-       The deal aims at sustaining businesses and workers that have been losing income.

-       Enabling the economy to recover once the quarantine orders are lifted.

Provisions of the package:

-       The package will provide direct financial support for low and middle-income families.

-       Payments for companies that have lost a majority or all of their customers due to the pandemic.

-       The package has earmarked $250 billion for individuals and families.

-       Workers with annual incomes of up to $75,000 will receive $1,200 in direct payments, which will increase to $2,400 for couples, as well as an additional $500 per child.

-       It allocates $500 billion for loans and guarantees to businesses, state and local governments.

-       This includes up to $50 billion for passenger airlines.

-       $8 billion for cargo carriers.

-       $17 billion for “businesses critical to maintaining national security.”

-       The companies have to maintain employment levels as of March 13, 2020, as far as possible.

-       $350 billion has been earmarked for small businesses to pay salaries, rent and utilities. These benefits will extend to businesses having 500 or fewer employees, as well as nonprofits, self-employed persons and hotel and restaurant chains having not more than 500 workers per location.

-       Provided $17 billion to help small businesses repay existing loans.

-       $10 billion for grants up to $10,000 for small businesses to pay operating costs.

-        $260 billion will be provided for emergency unemployment insurance, which will include an extra 13 weeks of coverage for those who have already used up existing benefits.

-       Self-employed and gig economy workers will also be covered, and weekly benefits will be increased up to $600.

-       $150 billion will be provided for healthcare, including $100 billion in grants to hospitals, Medicare and Medicaid suppliers.

-       Another $150 billion is allocated for state and local governments.

-       A disaster relief fund of $45 billion will be created to reimburse state and local governments for purposes of providing community services, medical services among other safety measures.

-       At least $27 billion is earmarked for research and development of coronavirus vaccines and treatments, and for stocking medical supplies.

-       Provided $25 billion for public transit systems, $10 billion for commercial airports that are publicly owned, and $1 billion for Amtrak trains.

-       The stimulus also includes $15.5 billion for food stamps and $8.8 billion for child nutrition.

Reference: https://indianexpress.com/article/explained/coronavirus-us-usd-2-trillion-package-explained-6332369/

ECONOMY

Of Chinese statistics and the Keqiang Index

Keqiang index:

It comprises of three parameters:

-       Electricity consumption,

-       Railway cargo volume

-       Bank lending

Need of the index:

-       It can measure with relative accuracy the speed of economic growth. 

Reference: https://www.thehindu.com/todays-paper/tp-opinion/of-chinese-statistics-and-the-keqiang-index/article31177675.ece

HEALTH

‘Trace, test, treat model helped S. Korea control virus’

Interview of Korean Ambassador:

Latest situation in Korea:

-       The number of new confirmed cases per day has been showing steady decline since hitting a peak at 989 in February to double-digit figures as of mid-March.

-       Korea might be the only country that hasn’t imposed a lockdown within its territories or even of its international borders.

About Korean Model:

-        It is grounded on concentrated testing of high-risk areas and clusters. 

-        The government listed all members of the group across the country, tracked their whereabouts and conducted tests on a massive scale, leading to the rapid increase in the number of confirmed cases.

Best Practices:

-        Korean medical teams and bio-companies were able to develop new testing kits with surprising speed. 

-       This made it possible for Korea to conduct mass-scale testing of 18,000 cases a day.

-       Anybody in Korea, who has symptoms or reasons to be tested can get the test within minutes at ‘drive-thru’ or ‘walk-thru’ testing centres and receive the result by text message the next day.

-       Openness and transparency is important to tackling this situation,

-       Identifying and isolating the core of the spread of the virus with full medical capacity at the earliest possible stage is key.

Impact on Korean companies:

-       Many Korean companies like Samsung, LG, Hyundai and Kia have ambitious plans for India, the biggest emerging market in the world. But, they are not receiving Visas.

Reference: https://www.thehindu.com/todays-paper/tp-life/trace-test-treat-model-helped-s-korea-control-virus/article31177642.ece