Government and Institutional Measures in Response to COVID-19

In the wake of the COVID-19 pandemic, India went into a long lockdown to break the chain of infection. It began from the midnight of March 24, 2020 which was completely unprecedented. Initially, imposed for 21 days, the lockdown was extended to last till May 17, 2020 but for containment zones it was extended till June 30, 2020. Thereafter, the process of ‘unlocking’ unfolded, gradually.

As the spread of the virus grew, the Centre announced a slew of policy measures to contain it. Measures were also announced to support businesses and citizens reeling under severe hardships due to the restrictions on the movement of men and goods. The first lockdown, ending on April 14, saw a slew of measures to ensure the lockdown remained in place.

Responding to the COVID-19 disaster and economic loss, a total amount of ` 20 lakh crore, 10 per cent of India’s GDP, was announced by the prime minister on May 12, 2020. This package included earlier relief measures and RBI announcements. The relief measures also included the RBI’s liquidity injection of ` 8.4 lakh crore through various announcements from February 2020 to April 2020. The announcement made in May 2020 was in continuation in the series of reforms initiated from March 2020. In this series, the first reform was Pradhan Mantri Garib Kalyan Yojana (PMGKY) which was announced on March 26, 2020.

Pradhan Mantri Garib Kalyan Yojana

PMGKY involved a relief package of ` 1.70 lakh crore. It was aimed to help the poor to tackle the financial difficulties. It was focused on the problems faced by the migrant labourers and daily wage labourers.

Under the package, five kg of wheat and rice (in addition to the current 5 kg allocation) and one kg of preferred pulses (based on regional preferences) were provided to poor families for three months. The distribution was through PDS and could be availed in 2 instalments. Such families were also entitled to get three free gas cylinders for three months, i.e., from April to June. The package also entailed ` 500 per month between April and June to women Jan Dhan account holders.

• Apart from this, the scheme provided insurance cover of ` 50 lakh to health workers; including doctors, nurses, paramedics, and Accredited Social Health Activist (ASHA) workers.
• Free LPG cylinders were given to women (below poverty line) for 3 months under the Ujwala scheme. Poor households using 5 kg cooking gas cylinders were entitled to 8 free refills in 3 months and 3 free refills for beneficiaries using 14.2 kg gas cylinders.
• State governments were asked to use the welfare fund for building and construction workers. It was decided to use ` 310 billion District Mineral Fund to aid those facing economic hardships as a result of the lockdown.
• MNREGA Hike The Mahatma Gandhi Rural Employment Guarantee wages were revised by the government with effect from April 1, 2020—there has been an average national wage increase of ` 20 (from ` 182 to ` 202) which would amount to an additional income of ` 2000 per worker. In order to liquidate the wage and material arrears, ` 4,331 crore was released by the Centre in the last week of March 2020 to states/UTs to liquidate the liabilities of the current fiscal year; the remaining such liabilities along with the first tranche for 2020–21 was to be released in the first half of April.

Employee’s Provident Fund Regulations were amended to allow non-refundable advance of 75 per cent of the amount or three months of wages.

As per the estimates of the Ministry of Finance, between March 26 and April 22, 2020, about 33 crore people benefited under the Pradhan Mantri Garib Kalyan Package by a financial assistance amounting to ` 31,225 crore through bank transfers. The beneficiaries included widows, women Jan Dhan account holders, senior citizens, and farmers.

PM CARES Fund

A public charitable trust, namely, the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) was set up to provide relief during COVID-19-like emergencies. The national fund aimed to provide relief to those affected by COVID-19 through donations collected. Donations were declared to be 100 per cent tax deductible; non-resident Indians can also contribute to it through foreign inward remittances.

Financial Measures to Relieve Citizens

• The government deferred the last date for filing the income tax return for the previous financial year to January 10, 2021. The scheme for resolving tax disputes, Vivad se Vishwas, was extended to January 31, 2021.
• The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 was promulgated on March 31, 2020. It was later enacted as a law and got the assent of the president on September 29, 2020. It is aimed at providing relaxations in payment of taxes by extending the time limits and waivers of penalties in such laws as Income Tax Act, 1961 (IT Act), certain finance acts, and the Prohibition of Benami Property Transactions Act, 1988.

The act extended time limits (for the period between March 20, 2020 to June 29, 2020) in relation to (i) issuing notifications, completing proceedings, and passing orders by authorities and tribunals; (ii) filing of appeals, replies, and applications, and fulfilling documents; and (iii) making any investment or payment for claiming deductions or allowances under the IT Act.

It provides that there will not be any prosecution or penalty for payment of any tax, made before January 10, 2021 or any other date specified by the government.

It also provides for the extension to time limits of various compliances under the Goods and Services Tax (GST) Act, 2017 (as per the notification of the central government). PM CARES Fund has also been included in the list under the Corporate Social Responsibility under the Companies Act, 2013, as per the notification of the Ministry of Corporate Affairs.

• The last date for the obligatory seeding of Aadhaar with PAN, which was deferred to June 30, 2020, has been extended to March 31, 2021.
• It was announced that an immediate release of ` 18,000 crore would be made in tax refunds to individuals and businesses.
• The rule about holding mandatory general board meetings every 2 quarters was relaxed; thus, a board meeting not held in 2019–20 would not be seen as infringement.
• There would be no charges for not maintaining a minimum bank balance in the savings account. On March 23, 2020 it was announced that for 3 months, debit-card holders could withdraw cash from all ATMs, even those not belonging to home banks without requiring to pay extra fees.
• The threshold limit for triggering bankruptcy was raised from ` 1 lakh to ` 1 crore to prevent companies from being driven to insolvency.

The steps taken by the government in the 3-week lockdown (except extensions) included the following:

• The Aarogya Setu mobile app was introduced to inform people about the coronavirus and the infection status.
• Plans were announced for setting up 20 lakh retail shops— ‘Suraksha Stores’—across India to provide essential items of everyday use to people while maintaining safety norms.
• To monitor and record the initiative to combat COVID-19, a web portal YUKTI (Young India Combatting Covid with Knowledge, Technology, and Innovation) was launched.

Steps Taken for Migrants

• The lockdown had a severe impact on migrants who lost their jobs as industries ceased to function during the lockdown. During the initial 3-week lockdown, activities not contributing to manufacture and supply of essential items and services were suspended either completely or in part. It had the most and immediate effect on migrants who were off-work and out of their native places. The government announced relief measures for migrants and made arrangements for their return to their native places.

The Supreme Court in May 2020 took note of the problems faced by migrants throughout the country and ordered the central and state governments to submit a report regarding measures taken by them to provide relief to migrant labourers. It asked the governments to provide free transport and food to migrant workers.

• The central government asked states to use the State Disaster Response Fund to provide accommodation to travelling migrants. When the lockdown was extended, many of the migrants started for their homes on foot due to suspension of public transport facilities. The government, somewhat slow to respond to the crisis, later started several buses and special trains to facilitate movement of migrants.
• In April 2020, states had to coordinate individually to transport migrants through buses. On May 1, the Railways, which had come to a stop on March 22, began to run Shramik Special trains to ensure transportation of migrants back to their native states. Some 4,197 Shramik trains were run during May, most of them starting off from Maharashtra and Gujarat and ending up in Bihar and Uttar Pradesh.
• State governments were directed to provide relief camps along highways for migrants with arrangements for food, sanitation, and medical services. Between May 1 and June, Shramik trains operated by Indian Railways transported more than 58 lakh migrants. Some 41 lakh migrants are reported to have been transported by road during that period.

On June 20, 2020, the central government announced the Garib Kalyan Rozgar Abhiyaan, an employment-cum-rural public works campaign, to promote employment and livelihood opportunities for migrant workers who had returned to their villages.

The Abhiyaan, launched at Telihar village, Khagaria district, Bihar,  focused on providing durable rural infrastructure and modern facilities like the internet in villages. The Abhiyaan was for 125 days’ duration and covered 116 districts in 6 states—Bihar (32 districts) Uttar Pradesh (31), Madhya Pradesh (24), Odisha (4), Jharkhand (3), and Rajasthan (22)—each of which faced the return of a large number of migrant workers.

The major objectives of the programme included providing livelihood to the migrants who came back and COVID-19 affected populace so that the migrants could get an opportunity of employment in their native place, according to their skills. It seeks to prepare for development of livelihoods over a longer term in villages.

• An amount of ` 50,000 crore was announced for building durable infrastructure under the programme. Twenty-five work areas were identified for development of various works and providing employment in the rural areas. The 25 projects address village needs relating to housing for the poor, provision of drinking water through Jal Jeevan Mission, Gram Panchayat Bhavans, rural mandis, roads, community toilets, cattle sheds, Anganwadi centres, community sanitation centres, national highway works, plantation works, waste management works, and farm ponds.
• Regarding provision of modern facilities, the Abhiyaan envisaged internet provision and laying of fibre cable.
• It was announced that farmers (about 86.9 million) would be given the first instalment of the PM-Kisan Scheme (minimum income support scheme) upfront for fiscal year beginning April 2020. By the end of the 3-week lockdown, over 60 million farmers had benefitted as ` 13,855 crore were released towards payment of the first instalment of PM-KISAN.

Measures for the Agriculture Sector

• The Ministry of Agriculture and Farmers Welfare on April 2, 2020, launched new features of the electronic-National Agriculture Market (e-NAM) platform in order to enable farmers to sell their harvested produce through contactless remote bidding and mobile-based any time payment without requiring traders to either visit mandis or banks. This also reduced the need for farmers to physically visit wholesale mandis, thus ensuring social distancing in the Agricultural Produce Market Committee (APMC) markets without affecting the continued supply of agriculture produce during the lockdown.
• The ministry issued an advisory to states for limiting the regulation under APMC Acts on April 4, 2020. The advisory asked the states to facilitate direct marketing of agricultural produce, direct purchase of the produce from farmers, farmer producer organisations, and cooperatives by bulk buyers, big retailers, and processors.
• It was announced that 30 million senior citizens, widows, and disabled would avail of a one-time ex-gratia amount of ` 1,000 each in 2 instalments over the next 3 years. Accordingly, under the National Social Assistance Programme, ` 1,400 crore had been disbursed to about 28.2 million of them by the first 3 weeks of the lockdown.

Immigration-related Measures

• As all domestic and international travel was suspended in March, some immigration-related measures were brought about. Foreign nationals stranded in India whose visa expired in the February-to-April period were to be given an automatic extension of their visas till April-end, once an online application was submitted by them. They could leave the country without having to pay an overstay penalty. These measures were further extended into May.
• For Overseas Citizens of India (OCI) card holders not in India, visa free travel facility was put in abeyance till the lifting of prohibition on international air travel.
• All foreign nationals, including OCI cardholders, wanting to travel to India for compelling reasons, could apply for a fresh visa.
• The visa and travel restrictions were eased for certain categories of foreign nationals on June 1, 2020. Those permitted to enter India included foreign healthcare professionals, health researchers, engineers, and technicians for health work in the Indian health sector; foreign specialists in engineering, managerial work, design work in manufacturing, design, IT and software units; and foreign technical specialists and engineers involved in work in foreign-origin machinery and equipment facilities in India.
• Visa restrictions were further relaxed for more categories of foreign nationals who wished to travel to India, including the category of foreign nationals holding journalist (J-1) and their dependants holding J-1x visa.
• Certain categories of OCI cardholders stranded abroad were allowed to come to India, including:

–——– minor children born to Indian nationals abroad and with OCI cards

– OCI cardholders on family emergency visits. Couples with permanent residence in India, only one of whom is an Indian national—the other being an OCI card holder

– OCI cardholding university students whose parents are Indian citizens residing in India.

• India entered into ‘Transport Bubbles’ or ‘Air Travel Arrangements’—temporary arrangements to restart commercial passenger services—with USA, Qatar, the Maldives, France, UK, Canada, and Germany.

Other Measures

Measures and government reliefs for some other sectors/activities were as follows:

• Medical Equipment In relation to export and import of medical items:

– Medical items prohibited for exports were surgical/disposable masks, all ventilators, textile material for making masks and coveralls, sanitisers, as well as hydroxychloroquine (restrictedly allowed) and formulations made of hydroxychloroquine.

– Importers were granted exemption from customs duty and healthcess (April–September 2020) on imports of certain medical equipment: artificial respiration apparatus or apparatus for other therapeutic respiration (ventilators), masks, COVID-19 testing kits and personal protection equipment (including inputs for producing them).

• Corporate Measures In corporate affairs, the following measures were announced:

– No fees was charged for late filing during the moratorium period from April to September 2020 for any document, statements, return required to be filed with the government.

– The mandatory requirement of holding board meeting within 120 days of the last meeting was extended by 60 days. Applicability of companies Auditors’ Report Order 2020 was postponed by 1 year—shifted to Financial Year 2021 (not FY20).

– There would be lower penalties for defaults by small companies, one-person company, producer companies, and start-ups.

– Companies were allowed to list securities directly in foreign jurisdiction.

– Private companies that listed debt securities on stock exchange were not to be regarded as listed companies.

Measures by the Reserve Bank of India

Like many other major central banks the world over, the RBI also undertook a slew of extraordinary monetary and regulatory measures to provide relief to institutional players in view of the cornavirus pandemic. The various policy measures adopted by the RBI included expanding liquidity, reinforcing monetary transmission, easing financial stress, and improving the functioning of markets. These policies were aimed at tackling the financial stress, caused by COVID-19 pandemic.

The important measures taken by the RBI were as follows:

1. The RBI allowed a moratorium of three months on payment of all instalments that were due between March 1, 2020 and May 31, 2020. This moratorium was provided by all commercial banks, including regional rural banks, small finance banks, and local area banks, co-operative banks, all-India financial institutions, and non-banking financial companies (NBFCs), including housing finance companies.
2. The RBI made the financing of working capital easy by asking the lending institutions to recalculate their drawing power by reassessing the working capital cycle, reducing their margins in relation to cash credit/overdraft facilities to the borrowers, affected due to COVID-19.
3. For the agricultural sector, the RBI extended benefits of interest subvention (of 2 per cent) and prompt repayment incentive (of 3 per cent) schemes for short-term crop loans up to ` 3 lakhs.
4. In order to enable the banks to lend, the RBI reduced repo rate by 75 basis points (bps) to 4.4 per cent, reverse repo by 90 bps to 0.90 per cent, and cash reserve ratio by 100 bps from 4 per cent to 3 per cent.
5. The RBI also announced targeted long-term repo operations (TLTRO 2.0) to make more liquidity available with the banks and to ease the flow of funds to small and mid-sized companies. These TLTROs are to be conducted at policy repo rate for three years and amount to ` 50,000 crore. The funds available under TLTRO are to be invested in investment grade bonds, commercial paper, and non-convertible debentures of NBFCs.
6. The RBI provided refinancing facilities amounting to
   ` 50,000 crore to all India financial institutions, including
   ` 25,000 crore to National Bank for Agriculture and Rural Development (NABARD), ` 15,000 crore to Small Industrial Development Bank of India (SIDBI), and ` 10,000 crore to National Housing Bank (NHB). NABARD will look after the refinancing of regional rural banks (RRBs), cooperative banks, and Micro Fianance Institutions (MFIs); SIDBI will be responsible for lending and refinancing; and NHB will provide support to housing finance companies (HFCs).

The RBI also reduced the fixed rate reverse repo rate under the liquidity adjustment facility (LAF) to 3.75 per cent from 4.0 per cent by 25 basis points.

7. On April 1, 2020, the RBI increased the Ways and Means Advances (WMA) limit of the states by 30 per cent. With this, the WMA limit for states and union territories increased by 60 per cent till September 30, 2020. This increase is over and above the limit as on March 31, 2020.
8. The liquidity coverage ratio (LCR) requirement for scheduled commercial banks was reduced from 100 per cent to 80 per cent. This will be restored in two phases—90 per cent by October 1, 2020 and 100 per cent by April 1, 2021.
9. It was specified that scheduled commercial banks and cooperative banks will not make any further dividend pay-outs from profits made in the financial year 2019–20. The move will help in saving the capital of these banks to support economy in the face of crisis.
10. Since February 2020, the RBI injected funds equal to 3.2 per cent of GDP into the economy to deal with the liquidity situation. The Governor of the RBI, Shaktikanta Das, on October 9, 2020, announced additional liquidity measures, including reduction in reverse repo rate and TLTRO, to provide relief to economy battered by the COVID-19 crisis.

ISRO’s Role in Containing COVID-19

ISRO helped the central government as well as various state governments in the fight against COVID-19 pandemic. It provided support through geospatial tools and location based solutions, including national level coronavirus tracker.

The geospatial information platform provided services in tracking, identifying hotspots, vegetable markets, food needed, home isolation, and pollution. In order to facilitate tracking of the pandemic and to provide timely updates to the people, ISRO customised the geoportal and developed Bhuvan COVID-19 at a national level. This dashboard provided information regarding the status of the pandemic at national level. With its application, ISRO also conducted various studies with different states governments.

The use of space applications and geospatial data provided essential location-based and temporal data. This helped in developing an overall data map and snapshots on the COVID-19 pandemic for policymakers and the public. The space department also tried to analyse the various impacts on account of lockdown with regard to atmospheric parameters and water. These tools and services proved quite useful in tackling the pandemic.

Additionally, many state level applications for states like Bihar, Tamil Nadu, Telangana were developed and deployed by the ISRO.

Bihar: A unique tool was deployed for the state to map the epicentre of the infections and to show containment zones or hotspots for containment with tertiary buffer zones. This was done to ensure effective management of the pandemic and to contain the spread of virus. The tool helped in the identification of villages and their population in the state. Along with this, very high resolution satellite images provided crucial household level information, which helped in strategic management of the pandemic at local level.

Telangana: The use of location based services through mobile apps linked to geoportal Bhuvan COVID-19 enabled services of mobile vegetable market at various places of Hydrabad.

Tamil Nadu: The state was provided geospatial support for geo location and tracking. These services helped in addressing the problem related to providing food to the need at various locations.

ISRO also provided Bhuvan services to geolocate patients in different zones like red, orange, green of a specified area of a city, district, or state.

State Governments Tackle COVID-19 Crisis

The state governments took various measures covering different sectors to tackle the COVID-19 crisis.

Agriculture Sector: Several state governments have relaxed agriculture marketing laws. The Uttar Pradesh government approved an ordinance, and Madhya Pradesh, Gujarat, and Karnataka promulgated ordinances to provide relief under regulatory aspects of their respective Agriculture Produce Marketing Committee (APMC) laws.

Labour Laws: Recognising the fact that the loss of economic activity due to pandemic has resulted in economic hardships for many individuals and businesses, many states have relaxed their labour laws. Several states—Gujarat, Rajasthan, Haryana, Uttrakhand, Himachal Pradesh, Assam, Goa, Uttar Pradesh, and Madhya Pradesh notified relaxations to labour laws through rules.

The notifications passed by Gujarat, Himachal Pradesh, Rajasthan, Haryana, and Uttrakhand governments have increased weekly work hours from 48 hours to 72 hours and daily work hours from 9 hours to 12 hours for some factories. This would check the shortage of labour and longer shifts would ensure fewer number to maintain social distancing. Uttar Pradesh has exempted all factories and establishments, engaged in manufacturing, from all labour laws for a period of three years.

Some states—Bihar, Madhya Pradesh and Rajasthan—announced one-time cash transfers for the migrants who were returning to their native places. Uttar Pradesh announced a provision of maintenance allowance of ` 1,000  for returning migrants who were placed under quarantine.