‘Benefits given in rural areas needed for urban poor too’

NEW DELHI: The government’s stimulus package such as free ration, enhanced wage under job guarantee scheme and direct transfer of benefits to the poor kept the rural economy in better shape during the pandemic, which must continue in addition to a similar policy push for creating urban demand, said Sanjiv Mehta, chairman and managing director of Hindustan Unilever and president of Federation of Indian Chambers of Commerce and Industry.

Although rural demand had softened a bit even before the pandemic hit the Indian economy in March 2020, it remained “resilient” during the pandemic period because of government’s timely interventions such as increased minimum support price (MSP), enhanced wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), free food to millions of people for months, direct transfer of money to the underprivileged, said Mehta, the new president of Ficci.

One of the key relief packages that was announced by finance minister Nirmala Sitharaman on March 26, 2020 was the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) to ensure supply of free dry ration to 800 million poor. Initially, it was launched for three months. But, later it was extended till March 2022 in five phases with total outlay of ₹2.60 lakh crore.

The package also revised wage rate under MGNREGA wage rate from April 1, 2020 with average wage rate increase of ₹20 over the wage rate of 2019-20 to benefit about 136 million rural families. Other relief measures included, one-time ex-gratia payment of ₹500 per month for three months starting from April 2020 to women Jan Dhan account holders benefiting 206.4 million rural women involving a total ₹30,944.44 crore, according to official data.