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Coronavirus

India announces $23bn welfare package to combat coronavirus

Government offers cash and grains over the next three months

Indians in Kolkata adhere to social distancing rules while waiting to buy medicine during a 21-day nationwide lockdown to limit the spread of the novel coronavirus in Kolkata.   © Reuters

NEW DELHI -- With 1.3 billion people locked down for three weeks in India to contain the spread of coronavirus, the government on Thursday announced a 1.7-trillion-rupee ($22.6 billion) welfare program for the poor that includes direct cash transfers and the provision of grains for free.

Frontline medical staff such as doctors, nurses, paramedics and medical sanitation workers will be provided with medical insurance of 5 million rupees each. India now has 649 confirmed coronavirus cases, including 13 deaths. The government ordered a nationwide lockdown that came into place on Wednesday.

Finance Minister Nirmala Sitharaman said during a news conference on Thursday that "those affected directly, particularly the poor, the migrant workers, the women, the disadvantaged of the society" will get the help they need. 

The package offers 800 million people each 5kg of either wheat or rice for free per month over the next three months in addition to the same quantity they already get at highly subsidized rates through the country's public distribution system, the world's biggest food security program. Each of these households will also get 1kg of its preferred legume per month over the next three months for free.

About 87 million farmers will get 2,000 rupees each in the first week of April under a farmer welfare scheme which is already in place, she said, adding that rural workers' wages too will be increased, a move that will benefit 50 million families nationwide.

"We do not want anyone to remain hungry so we will be giving enough to take care of their food grains requirement and protein requirements in terms of pulses," the minister said.

Japanese brokerage Nomura said the economic package, which amounts to 0.8% of India's gross domestic product, is important from the standpoint of social welfare but does not address the cash flow challenges faced by small and medium enterprises and other hard-hit sectors such as aviation, hotels and tourism.

"It is possible that a second package will be announced, but it is not imminent, in our view," Nomura added.

Rajan Wadhera, president of the Society of Indian Automobile Manufacturers, said the relief package's announcement will bolster the faith in government of vulnerable sections of society.

"We hope the government will also soon announce measures to support the automotive industry," said the head of the trade group, which has faced a months-long decline in auto sales.

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