As of April 20, 2020, there are 17,265 confirmed cases of COVID-19 in India. Since April 13, 8,113 new cases have been registered. Out of the confirmed cases so far, 2,547 patients have been cured/discharged and 543 have died. As the spread of COVID-19 has increased across India, the central government has continued to announce several policy decisions to contain the spread, and support citizens and businesses who are being affected by the pandemic. In this blog post, we summarise some of the key measures taken by the central government in this regard between April 13 and April 20, 2020.
Source: Ministry of Health and Family Welfare, PRS.
Lockdown
Lockdown to remain in force until May 3, 2020
The lockdown has been extended until May 3, 2020 with certain relaxations taking force as of April 20, 2020. Activities that continue to remain prohibited after April 20, 2020 include: (i) all international and domestic travel except for healthcare workers and security purposes, (ii) passenger travel in trains, buses and taxis, (iii) industrial activities and hospitality services (other than those permitted), (iv) all educational institutions, and (v) all religious gatherings. Activities that are permitted after April 20, 2020 include: (i) all health services such as hospitals, clinics, and vets, (ii) agricultural operations, fisheries, and plantations, (iii) public utilities including provision of LPG and postal services, (iv) financial establishments such as non-banking financial institutions, banks and ATMs, (v) e-commerce for essential goods only, and (vi) industrial activities such as oil and gas refineries and manufacturing. Persons who do not follow the lockdown may be punishable with imprisonment up to one year and a fine, or both. States and union territories may not dilute these lockdown guidelines specified by the central government. However, they may implement stricter measures.
Certain areas within hotspots demarcated as containment zones
Hotspots refer to areas where there are large COVID-19 outbreaks or clusters with a significant spread of COVID-19. Within hotspots, certain areas may be demarcated as containment zones by the state or district administrations. There will be a strict perimeter control in the containment zones. Inward and outward movement from the containment zones will be restricted except for essential services such as medical emergencies, and law and order related activities.
Movement of stranded migrant labour
The Ministry of Home Affairs has permitted the movement of stranded migrant labour within the state in which they are stranded for work in activities permitted after the relaxation of the lockdown on April 20, 2020. These activities include industrial work, manufacturing, and construction. State governments may undertake skill mapping of migrant labourers and transport them to worksites if they are asymptomatic and willing to work. Movement of migrant labour across state borders continues to be prohibited.
Financial Measures
RBI announced additional measures to combat economic situation due to COVID-19
The International Monetary Fund’s Economic Counsellor has estimated the cumulative loss over 2020 and 2021 to global GDP due to the global economic lockdown to be around 9 trillion dollars. To combat the economic impact of COVID-19 in India, the Reserve Bank of India (RBI) has announced several additional measures. These include: (i) reduction in reverse repo rate from 4% to 3.75%, (ii) targeted long-term repo operations for an aggregate amount of Rs 50,000 crore, (iii) refinancing of financial institutions such as National Bank for Agriculture and Rural Development, Small Industries Development Bank of India, and National Housing Bank for a total amount of Rs 50,000 crore to enable them to meet the financing needs of sectors they cater to.
Dividend payments by banks
In light of the economic impact of COVID-19, the RBI announced that banks shall not make any further dividend payouts from the profits pertaining to the financial year which ended on March 31, 2020. According to RBI, this will allow banks to conserve capital to retain their capacity to support the economy and absorb losses. This restriction will be reassessed based on the financial results of banks for the quarter ending in on September 30, 2020.
Short term credit to states
RBI has announced an increase in the Ways and Means Advances (WMA) limits for states and UTs. WMA limits refer to temporary loans given by the RBI to state governments. The WMA limit has been increased by 60% from the limit as on March 31, 2020, for all states and UTs. The revised limits will be in force between April 1 and September 30, 2020.
Travel and export
Travel restrictions to continue
Since the lockdown has been extended until May 3, 2020, domestic and international travel remains prohibited. All domestic and international flights will not function until May 3, 2020. Further, the Director General of Civil Aviation has specified that airlines should not start allowing ticket bookings from May 4, 2020 onwards as there has been no clearance for such activities to commence. All passenger trains will also remain cancelled until May 3, 2020. There will be a full refund for flight tickets purchased during the lockdown period for travel before May 3, 2020. Further, there will be a full refund for tickets booked for trains that were cancelled during the lockdown and cancellation of advance bookings of tickets for trains not yet cancelled.
Export of paracetamol
The Ministry of Commerce and Industry has specified that formulations made of paracetamol may be freely exported from April 17, 2020 onwards. However, the export of paracetamol active pharmaceutical ingredients (APIs) will continue to be restricted. On March 3, 2020, the export of both formulations made of paracetamol and paracetamol APIs was restricted.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
According to news reports, the Prime Minister recently chaired a meeting with ministers to discuss an alternative plan (“Plan B”) for the National Food Security Bill, 2011 (hereinafter “Bill”). The Bill is currently pending with the Standing Committee of Food, Consumer Affairs and Public Distribution. It seeks to deliver food and nutritional security by providing specific entitlements to certain groups. The alternative proposal aims to give greater flexibility to states and may bind the centre to a higher food subsidy burden than estimates provided in the Bill. It suggests changes to the classification of beneficiaries and the percentage of the national population to be covered by the Bill, among others. Classification of beneficiaries The Bill classifies the population into three groups: priority, general and excluded. Individuals in the priority and general groups would receive 7 kg and 3 kg of foodgrain per person per month respectively at subsidized prices. Plan B suggests doing away with the priority-general distinction. It classifies the population on the basis of 2 categories: included and excluded. Those entitled to benefits under the included category will receive a uniform entitlement of 5 kg per person per month. Coverage of population Experts have suggested that the Bill will extend entitlements to roughly 64% of the total population. Under the Bill, the central government is responsible for determining the percentage of people in each state who will be entitled to benefits under priority and general groups. Plan B suggests extending benefits to 67% of the total population (33% excluded), up from 64% in the Bill. The Ministry has outlined two options to figure out the number of people in each state that should be included within this 67%. The first option envisages a uniform exclusion of 33% in each state irrespective of their poverty level. The second option envisages exclusion of 33% of the national population, which would imply a different proportion excluded in each state depending on their level of prosperity. The Ministry has worked out a criterion to determine the proportion of the population to be included in each state. The criterion is pegged to a monthly per capita expenditure of Rs 1,215 in rural areas and Rs 1,502 in urban areas based on the 2009-10 NSSO survey. Thus, persons spending less than Rs 40 in rural areas and Rs 50 in urban areas per day will be entitled to foodgrains under the alternative being considered now. Financial estimates Newspaper reports have indicated that the revised proposal will add Rs 7,000 to Rs 10,000 crore per year to the current food subsidy estimate of Rs 1.1 lakh crore. According to some experts, the total cost of the Bill could range anywhere between Rs 2 lakh crore to Rs 3.5 lakh crore (see here and here).
