Economists propose Rs 3.6 lakh crore cash transfer during three months of lockdown

It is estimated that a large part of the 40-50 million migrant labour are unemployed.

The appeal for urgent intervention from the Central and state governments is to ameliorate the impact on vulnerable workers and populations induced by COVID-19 lockout.

The Indian Society of Labour Economics (ISLE) and the signatories to the letter strongly appealed to the Central government for a three to four fold increase in the current relief package.

They have demanded that the Centre and states together should try and ensure a minimum transfer of at least Rs 6,000 per month to each Jan Dhan Yojana woman account holder with a major part borne by the Central government over the next three months.

In addition, all state governments should ensure that at least 10 kg of free rations per person per month along with other necessary items are available for all eligible households. They have also demanded a three to four fold increase of the current short-term relief package for impacted informal workers.

ISLE said in a statement that as the corona pandemic and the measures to contain it unfold, India is witnessing a humanitarian and economic crisis of unprecedented proportions. While welcoming the Central government's Rs 1.7 trillion package and various measures taken by state governments, the ISLE and the signatories to the letter strongly appealed to the government of India for a three to four fold increase in the current relief package.

In the letter to the Prime Minister and the Chief Ministers, they have proposed urgent additional measures that are required to address critical gaps that exist in the short-term relief measures announced so far.

These measures include a cash transfer of Rs 6,000 per month to each household which does not have a person in formal employment or is not a tax payer. The estimated burden of about Rs 3.60 lakh crore for three months to be borne principally by the Centre but shared between Centre and states.

A large numbers of informal workers in the urban economy are migrants who are currently without employment, wages, or shelter. It is estimated that out of a total of forty to fifty million wage employed seasonal circular migrants in the informal economy, a large proportion -- especially those in construction, manufacturing or transport/travel industries -- are currently without employment and want to head back to their villages, with their accompanying family members. These figures will increase if the lockdown extends, the statement said.

All public sector entities should issue immediate orders for the retention of contract employees and payment of full wages to them. The Central government has been requested to come out with a scheme to compensate the unorganised and MSME sector for payment of wages to contract and temporary employees during the lockdown.

They have urged the governments to provide ex gratia payments and to ensure that no needy person or household remains outside the social protection net being created to cope with the current calamitous conditions.

The facilities and space at the disposal of the Centre and the States should be utilized such that there is no over-crowding for migrants who stay back and food and subsistence facilities should be made available; States should step up community feeding programmes; NDMA should immediately and urgently oversee a coordinated arrangement for transporting migrant workers who are already on the road by special trains, buses, or trucks. etc. to their home states/districts.

The signatories to the letter include Deepak Nayyar, former Chief Economic Advisor and President, ISLE, Alakh Sharma, Conference President, ISLE, Ravi Srivastava, Indira Hirway, D N Reddy, Ajit Ghose, Jayati Ghose, Abhijit Sen, Prabhat Patnaik, S.K. Thorat, K.P. Kannan, S.S. Gill, S Mahendra Dev -- all former Conference Presidents of ISLE.