Commerce Dashboard

Pradhan Mantri Garib Kalyan Yojana

Introduction
In 2016, the Govt. of India launched Pradhan Mantri Garib Kalyan Yojana as a part of the Taxation Laws Act 2016 (second amendment). The initial objective of the PM garib kalyan yojana scheme was to ensure tax evaders declare unaccounted money and avoid penalty and criminal prosecution. Through this scheme, the govt. intended to use the deposited black money for welfare of the poor people. The scheme was valid from December 2016 to March 2017.

In 2020, the govt. extended the scheme to include relief packages during the pandemic. The aim was to support livelihood of poor during COVID-related lockdowns.

Objective of the Pradhan Mantri Garib Kalyan Yojana (PMGKY)
The PMGKY was initially launched to bring back black money from tax evaders by offering them protection from government prosecution. Under the PM garib kalyan yojana scheme, the govt. opened a window for tax evaders to disclose unaccounted income with a 49.9% tax rate. The plan was to use the deposited amount for eliminating income inequality in the country.

With the scheme extension in 2020, the govt. announced relief packages during the COVID-19 pandemic. The objective of the extension was to prevent employment disruption of low wage earning employees and support small establishments (with up to 100 employees). Under the extension, the central govt. provided entire employee EPF contributions (12% of the total wages) and employers’ EPF & EPS contributions (12% of wages), totalling 24% of the monthly wages for three months. Along with this, the govt. also announced relief packages to support the poor through various schemes. A relief package worth Rs. 1.70 lakh crore was announced by the Union Finance & Corporate Affairs Minister Ms. Nirmala Sitharaman under the PMGKY.

The scheme was initially planned for three months, but it was extended until November 2020.

Policy Details
The Pradhan Mantri Garib Kalyan Yojana 2020 aims to provide relief to different sections of the society such as migrant workers, farmers, urban & rural poor and women. The govt. identified sections that were hit the hardest amid COVID-induced economic disruptions. To focus on each section, the govt. launched several schemes under the PMGKY. The following three schemes are noteworthy:

  • PM Garib Kalyan Anna Yojana – Provision of food grains to the poor (rural & urban) through the PDS
  • Cash Transfer Scheme – Rs. 500 each to women who have Jan Dhan accounts
  • Insurance Scheme – Medical insurance to health workers including doctors, nurses, Asha workers, paramedics and sanitation workers

Components of PMGKY
The following are components of the PM Garib Kalyan Yojana package:

PM Garib Kalyan Anna Yojana
This is the worlds’ largest food security scheme launched by the Government of India to combat COVID-induced economic disruptions. The scheme aims to ensure food safety (of the poor) by providing food items including 5 kg rice/wheat per individual and 1 kg gram per family every month for free.

All beneficiaries of the targeted public distribution system (TPDS) for Antyodaya Anna Yojana (AAY) and priority household (PHH) ration cardholders are eligible for food grains under this scheme. Key features of the scheme include the following:

  • 80 crore individuals, i.e., ~66% of India's population was covered under this scheme
  • Each one of them received double of their current entitlement. This additionality was free of cost.
  • To ensure availability of protein, 1 kg of pulses were provided to families (as per regional preferences)

Cash Transfer Scheme
Under this, a total of 20.40 crore PMJDY women accountholders received a monthly cash transfer of Rs. 500. In the first three months of the scheme, over Rs. 31,000 crore was deposited in the bank accounts of these women accountholders.

Insurance Scheme for Health Workers Fighting COVID-19
Under this scheme, the govt. has insured health professionals treating COVID-19 patients. In case of  accidental death of these healthcare professionals, the family would be compensated with an amount of Rs. 50 lakh. Accidental death includes death due to COVID or accident while engaging with COVID-related duty. The premium of this scheme is being borne by the Ministry of Health and Family Welfare.

Public healthcare providers including community health workers, private hospital staff and retired /volunteers/local urban bodies/contracted/daily wage/ad-hoc/outsourced staff requisitioned by the states/central hospitals/autonomous hospitals of the Central/States/UTs, AIIMS and INIs/hospital of the Central Ministries are included in this scheme.

Apart from these healthcare professionals, employees such as ’safai karamcharis’, ward boys, nurses, ASHA workers, paramedics, technicians, doctors & specialists and other health workers were also covered.

The scheme covered ~22 lakh health workers who are fighting the pandemic.

Other prominent schemes launched or accelerated through PMGKY includes the following:

Advance Payments to Farmers under PM KISAN

To support farmers during COVID, the govt. advanced the first instalment of PM Kisan Yojana. The installment of Rs. 2,000 was due in 2020-21, but was frontloaded and paid in April 2020. This covered about 8.7 crore farmers.

Support to Low-wage Earners in Organised Sectors

To support small businesses, the govt. proposed to pay 24% of employees’ monthly wages into their PF accounts.

Wage earners (earning below Rs. 15,000 per month) in a business with <100 workers were eligible for this scheme.

Free Gas Cylinders to Poor Families

For three months starting April 2020, the government provided free liquefied petroleum gas (LPG) cylinders to over 8 crore Prime Minister Ujjwala Yojana (PMUY) beneficiaries.

MNREGA Worker Support

The govt. increased MNREGA wages by Rs. 20 with effect from April 1, 2020. The step was to provide an additional per capital benefit of Rs. 2,000 to a worker. Approximately 13.62 crore families  benefitted from this scheme.

Support to Senior Citizens

To support the senior citizens and people with disabilities, the govt. transferred Rs. 1,000 for three months to 3 crore aged widows and people in the Divyang (handicapped) category.

Other Measures

The Govt. of India also amended the EPF regulations to include pandemic as the reason to allow non-refundable advance of 75% of the EPF amount or three months’ wages (whichever is lower).

It also allowed a welfare fund for building and other construction workers to aid and support  workers during COVID disruptions. The fund supported about 3.5 crore registered workers.

Scheme Outcome

Under the PM Garib Kalyan Package, over Rs. 68,820 crore was provided through cash or aid to 42 crore poor people across the country.

Rs. 30,952 crore was transferred to women account holders of the PMJDY; Rs. 2,814.5 crore was transferred to 2.81 crore elderly people, widows and people with disabilities; Rs. 17,891 crore was paid to farmers as an advance instalment under the PM Kisan Yojana; and Rs. 4,987 crore was distributed to support 1.82 crore construction and building workers.

Apart from this, Rs. 2,476 crore was contributed to the EPF account of 0.43 crore employees and Rs. 9,700 crore was transferred to beneficiaries of the PM Ujjwala Yojana.

Conclusion

The PMGKY is making fast leaps to achieve its objective of removing poverty from the country. The scheme has not only witnessed the return of black money from tax evaders, but has also helped the govt. tackle challenges of pandemic-related economic disruptions. PMGKY has outlined a blueprint for supporting poor people during COVID and helped the country prevent further deterioration of the rich and poor income divide.

Through several schemes and packages under the PMGKY, the govt. has helped poor citizens continue their daily lives despite their inability to work.