Wednesday, 13 May 2020
Covid-19 position as on 8/5/2020
Country Confirmed Recovered Death GDP* Debt to
Fatality in GDP
India 56,351 16,776 1889 (3.4%) 2.719 68.52%
Canada 64,922 28,972 4408 (6.8%) 1.713 34%
Malaysia 6,467 4,776 107 (1.7%) 358.582 52.5%
Relief Package by these countries
The people of India is under lock-down since 25/3/2020. It was extended thrice which lasts till 17/5/2020. Everyone felt that the lock-down is necessary to face COVID-19. This virus is a challenge to Medical scientists, WHO, ICMR etc. WHO & ICMR had to change their guidelines based on inputs from various sources.
In 2018-19 India’s GDP was Rs.190.10 lakh crore. India’s finance minister announced a relief package for Rs.1.76 lakh crore ( 22.6 billion US $) which is less than 1% of GDP. The relief package includes five kg of rice or wheat plus one kg of pulse at free of cost to low-income family accounting for 80 crore people for next three months; free gas cylinder supply to 8.3 crore families; Rs.500/- cash transfer to poor people; Rs.2000/- for farmers (which is from the budget). There was lot confusion about postponement of EMI. In addition, many State Governments announced additional ration, cash transfer. But these measures are highly insufficient. Nobel laurels on economics like Joseph Stiglitz, Amritya Sen, Abhijit Banerjee and others like former RBI Governor Raguram Rajan strongly advocates that India can extend relief package upto 5 or 6% of GDP which works out to Rs.9.5 lakh crore to Rs.11.4 crore. They strongly advocate that India can manage this burden by borrowing, adjusting the budgetary estimate reducing the expenditure on certain heads which are not urgently required. The Govt. can effect cash transfer of Rs.5000/- per month to poor people, can extend some concessions including soft-loan to Micro, Small, Medium Enterprises (MSME).
The Govt. appealed to the owners of the companies to give salary to their employees for the lock-down period. On the other hand the Govt. freezed DA to Govt. employees and pensioners for more than an year. They did not behave as a model employer. So, many owners of the companies ignored the appeal of the Govt.
Canada has a population of 3.77 crore in 2019 (like Kerala state). It announced a relief package of 52 billion Canadian dollar ( 1 CD = Rs.54/-. So, it works out to Rs.2,80,800 crore) on 25/3/2020 to fight COVID-19. It includes unemployment benefit to 10 lakh people @ 2000 canadian dollars per month for 4 months; Delayed student loan payment for 3 months. The relief package was approved by Parliament. The modified Bill caps Ottawa’s emergency spending power at 6 months and allows a House Committee controlled by opposition legislators to force Parliament back over spending abuses.
Malaysia has a population of 3.26 crore in 2019. It’s PM is Mr. Muhyiddin Yassin. This country got COVID-19 through travelers from China via Singapore on 25/1/20. Malaysia announced the first lock-down on 18/3/20 which was subsequently extended twice. The people can come out of their houses only to purchase essentials like groceries, vegetables and for health-care. The lock-down is to end on 12/5/20. Malaysian Govt. first announced a stimulus package for 4.8 billion US $ out of which 453 US $ goes to tourism industry which is worst affected by the lock-down. For small businesses in the tourism industry $ 43 million micro-credit scheme is provided. Deferment of monthly tax instalment to Hotels, Airlines and businesses in tourism industry from 1/3/20 to 31/8/20. Travel document vouchers worth $ 22 per person is provided since March 2020. Provided 6 million $ to tourism promotion. Incometax relief to the extent of $ 226 to the individuals is provided for expenses on domestic tourism from 1/3/20 to 31/8/20.
Provided $ 45 million to help businesses to upgrade the skills of workers in Retail, hospitality, tourism, electrical, electronic and auto manufacturing.
Usually the employee’s contribution is 7 to 11 percent of monthly income which is now reduced to 4%.
Low-income house-holds will get monthly 200 ringgits (Malaysia’s currency – 1 Ringgit = Rs.17.43).
MSMEs (Micro, Small, Medium Enterprises) make-up 98% of Malaysia’s economy. The country’s Central Bank (like RBI), Bank Negara Malaysia (BNM) provided loan to the tune of $ 453 million to MSMEs @ 3.75% interest per annum. Each MSME is eligible to receive $ 2,26,000 with a tenure of 5.5 years including 6 months payment moratorium. The Govt. will provide banks with 80% guarantee on loans.
BNM allocated $ 226 million to a loan scheme to food production industry for a period of 8 years @ 3.75% interest per annum and $ 9 million is allotted to agriculture sector.
2nd stimulus package was announced on 27/3/20 for 250 billion Ringgits.
Workers earning less than 4000 Ringgits per month is eligible to receive 600 Ringgits per month for next 3 months.
One billion Ringgits is to be distributed to increase the domestic production of Agriculture, Fisheries & Livestock products.
If the monthly income of a house-hold is less than 4000 Ringgits the family will get 1600 Ringgits per month; if the income is between 4000 & 8000 then those families will get 1000 Ringgits; Individuals above the age of 21 having an income of less than 2000 Ringgits then that individual will get 800 Ringgits p.m; if the income is between 2000 & 4000 then 500 Ringgits will be given.
3rd stimulus package was announced on 6/4/2020 for 10 billion Ringgits.
$ 7.9 billion was earmarked for expansion of wage subsidies for employees based on the size of their workforce. $ 2.1 billion is earmarked for a special grant of 3000 Ringgits for all registered MSMEs with a turn-over of less than 3 lakh Ringgits or less than 5 employees. By this, 48 lakh workers will be benefited.
Now Indian people can understand the difference. Even though Indian Government also implemented lock-down from 25/3/20 and extended twice which lasts till 17/5/20 announced an economic package once for 1.76 lakh crore which is highly insufficient. Everyone can witness the plight of migrant workers families’ sufferings and their determination of going to their home-state even by foot risking their lives.
(By D Gopalakrishnan, CHQ VP, AIBSNLPWA at Chennai)