Across the Aisle: Remonetise the poor

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Published: April 12, 2020 3:00 AM

The cost will be a maximum of Rs 65,000 crore — absolutely affordable, perfectly feasible, fiscally prudent, economically justified and socially imperative.

A rickshaw puller during the nationwide lockdown to curb the spread of coronavirus, in Old Delhi (PTI)A rickshaw puller during the nationwide lockdown to curb the spread of coronavirus, in Old Delhi (PTI)

The first positive case of coronavirus was identified in China on December 30, 2019.

As the virus spread across Wuhan city, and then across Hubei province, and then to other provinces of China and other countries, fear gripped the world. By the end of January 2020, 27 countries had been affected. On February 12, 2020, Mr Rahul Gandhi tweeted: “The Corona Virus is an extremely serious threat to our people and our economy. My sense is the government is not taking this threat seriously. Timely action is critical.”

By February 12, the Central government had taken only two significant steps: (1) on January 17, the first advisory was issued against travel to certain countries and (2) on February 3, e-visas issued to visitors from certain countries were suspended.

Mr Gandhi was right
As expected, there were trolls. One Saral Patel wrote, “Hey genius. Have you checked the latest news.” Another, Pooja, wrote, “Oh God, you can sense also. Stop joking and get back to watching Pogo…..” I wonder where Mr Saral Patel and Ms Pooja are hiding today. On March 3, Mr Gandhi tweeted again demanding “an action plan backed by solid resources to tackle this crisis”.

Beginning March 14, the Central government acted, quarantining visitors from certain countries, closing borders with neighbouring countries, restricting international flights, banning domestic flights and, finally, declaring a lockdown with effect from March 25.

In retrospect, Mr Gandhi was right; he was among the first to warn of a grave crisis. Some states like Karnataka, Maharashtra, Punjab and Tamil Nadu acted earlier than the Central government and declared their own lockdowns of parts of the states. The debate whether the Central government should have taken firm steps in February rather than in March will continue long after the battle against COVID-19 is won.

The purpose of this column is not to dissect the past, the purpose is to goad the government to take bold measures so that India will remain ahead of the curve in the battle against the virus, in saving lives, in protecting livelihoods, and in rescuing and reviving a sliding economy.

Need bold action
There is unanimity on the broad heads under which the governments must act:
1.Containment and medical treatment.
2. Livelihood support for the poor and vulnerable.
3. Maintenance of essential household supplies and services.
4. Rescue and revival of a sliding economy.

On the first, the Central government, after several false starts, seems to be getting its act together. It is bearing down upon state governments to enforce the lockdown strictly. Under pressure from epidemiologists and opposition leaders, it has finally come around to increased, if not extensive, testing using also the recently approved antibody tests that will yield quicker results. Healthcare facilities as well as procurement of medical and protective equipment are being enhanced, with the state governments taking the leadership role. There are still miles to go.

On the second, the Central government has woefully failed and has not extended financial support to the state governments. The poor and the vulnerable have the first claim on the resources of the country. The Central government’s Financial Action Plan (announced on March 25) was miserly, ignored many sections, and was a big factor in pushing migrant workers to leave towns and cites to go back to their villages — tragically, many would have carried the virus with them.

Poor have first claim
Despite the state governments providing them some cash, most of the poor are still without any livelihood support. We must remonetise the poor — that is, put cash in their hands. The goal is to cover up to 50% of the 26 crore families in India, roughly up to 13 crore families.

For the urban poor, start with the Ujjwala lists of oil marketing companies. Refer to Jan Dhan (and the previous ‘no frills’) accounts. Refer also to those enrolled under the Jan Arogya-Ayushman Bharat schemes. De-duplicate using Aadhaar. Authorise states to cross-check with their BPL lists and draw up the final list.

For the rural poor, start with MGNREGA payrolls of 2019. Refer to the Jan Dhan (and previous ‘no frills’) accounts. Refer also to the Ujjwala lists. De-duplicate using Aadhaar. Authorise states to cross-check with their BPL lists and draw up the final list.

In tribal areas, cover all families.

I think it is possible to draw up state-wise lists (of up to 13 crore families), give or take a few hundred thousands. There will be some cases of duplication (and hence double benefit), but it does not matter in a national emergency. With the aid of information technology, state governments can do the job in five days.

On April 14, the Prime Minister should go on national television and announce the decision that Rs 5,000 will be credited to the bank account of every identified poor family in three days, as a first instalment, and if the beneficiary-family did not have a bank account, the money will be delivered at their door. The cost will be a maximum of Rs 65,000 crore — absolutely affordable, perfectly feasible, fiscally prudent, economically justified and socially imperative.

Thereafter, even if the lockdown is extended, the poor will be able to bear the hardship.

That leaves points three and four above. Let’s do first things first. Let’s live up to our declarations that the poor have the first claim on the nation’s resources.

Website: pchidambaram.in
Twitter @Pchidambaram_IN

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