Misfortunes never come alone. Just as India was trying to remedy an economic slowdown, the coronavirus pandemic came in like a wrecking ball. Priorities changed from reviving the GDP print to surviving the unprecedented calamity. Government had to divert its attention and resources, among other things, to assuage the pandemic-triggered hardships on the vulnerable sections.
Between March and November last year, the central government announced three relief packages, cumulatively worth Rs 24.35 lakh crore. The objectives ranged from ensuring food security for millions to making India 'atma nirbhar' enough to brave the challenges of COVID times. However, each announcement was followed by a common question - will this be enough?
The first relief package came on March 26, 2020, one day after India went into the first leg of its coronavirus-mandated lockdown on March 24, 2020. Centre announced Rs 1.70 lakh crore package under Pradhan Mantri Garib Kalyan Yojana. The package was meant to help the poor fight the COVID-19 menace, "so that they do not face difficulties in buying essential supplies and meeting essential needs," Finance Minister Nirmala Sitharaman had said while announcing the package.
The package was meant to provide food and financial security to poor households. It was a mix of direct cash transfers, supplementing existing welfare schemes (PDS, MNREGA, PM-KISAN, Ujjwala, EPF, a workers' cess fund), and provisions for help - insurance cover and collateral-free loans - to certain sections. Since parts of it were already budgeted, the additional fiscal outflow under this package, at the time it was announced, was pegged at Rs 73,000 crore, according to SBI Research.
A couple of months later, on May 12, 2020, PM Narendra Modi announced Rs 20 lakh crore stimulus package following his 'Atma Nirbhar Bharat' clarion call. This package included the Rs 1.70 lakh crore fiscal stimulus announced in the first phase of announcements under Pradhan Mantri Garib Kalyan Yojana package, Rs 5.6 lakh crore stimulus provided through various monetary policy measures of RBI and Rs 5.94 lakh crore through the second phase. Although the total package was worth 10 per cent of the GDP, the actual fiscal outgo was only Rs 1.14 lakh crore, or 0.6 per cent of the GDP, as per economists at SBI.
Six months later, on November 12, 2020, Finance Minister Nirmala Sitharaman once again announced a slew of measures in view of the coronavirus pandemic. The measures amounted to Rs 2.65 lakh crore, with emphasis on employment generation. Additional Rs 10,000 crore was allocated to Pradhan Mantri Garib Kalyan Yojana. One of the major steps taken in the third package was extending performance linked incentive (PLI) scheme to 10 sectors in total, with a financial outflow of Rs 1.45 lakh crore over a period of 5 years.
Other steps included extending the scope of Emergency Credit Line Guarantee Scheme (ECLGS) to COVID-19-affected sectors identified in the Kamath Committee report, Rs 18,000 crore to Prime Minister Awaas Yojana - Urban (PMAY-U), Rs 6000 crore equity infusion in NIIF Debt Platform, and funds for R&D in indigenous COVID-19 vaccine.
But the overall fiscal impact of these steps, during the current fiscal, remained Rs 1.5 lakh crore, as per SBI Research. This was primarily because the expenditure under the PLI scheme was spread over 5 years.