Central government’s response to the COVID-19 pandemic (May 23 - May 29, 2020)

As of May 29, 2020, there are 1,65,799 confirmed cases of COVID-19 in India.  47,352 new cases have been registered in the last week (since May 22).  Out of the confirmed cases so far, 71,106 patients have been cured/discharged and 4,706 have died.  Most cases are in the state of Maharashtra (59,546) followed by the states of Tamil Nadu (19,372), Delhi (16,281) and Gujarat (15,562).  

With the spread of COVID-19, the central government initially undertook many measures to contain the spread of the pandemic, including restrictions on travel and movement through national lockdown.  With gradual resumption of activities, the central government has recently announced measures to ease restrictions on travel and movement.   Further, the government has continued to announce policy decisions to ease the financial stress caused by the pandemic, and to contain further spread of the pandemic.  In this blog post, we summarise some of the key measures taken by the central government in this regard between May 23 and May 29, 2020.

Figure 1: Day wise number of COVID-19 cases in the country

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Source: Ministry of Health and Family Welfare; PRS.

Finance

RBI announces additional measures to ease financial stress caused by COVID-19

On May 22, the Reserve Bank of India (RBI) issued a statement with various development and regulatory policies to ease the financial stress caused by COVID-19.   These measures include: (i) improving liquidity in the market; (ii) support to exports and imports; and (iii) easing capital financing.  Subsequently, following measures have been notified by the RBI: 

  • In March 2020, the RBI had permitted all lending institutions to grant a moratorium of three months on payment of all term loans outstanding as of March 1, 2020.   This has been extended by another three months (till August 31, 2020).  Such deferment will not result in downgrade in asset classification.
     
  • For working capital such as cash credit or overdraft as well, lending institutions are permitted to allow a deferment of another three months on recovery of interest (till August 31, 2020). 
     
  • Currently, the exposure limit of a bank to a group of connected counterparties is 25% of the eligible capital base of the bank.  As a one-time measure to ease difficulty in raising funds, this limit has been relaxed to 30% of capital base of bank. 

Travel and Movement 

Domestic Air travel resumes; fare limits set by government

Domestic passenger air travel has been resumed in a phased manned (with one-third capacity of operations) from May 25, 2020 based on the announcement of the Ministry of Civil Aviation on May 21.  To ensure that airlines do not charge excessive fare and to ensure that journey is only for essential purposes, the Ministry of Civil Aviation issued an order to limit the minimum and maximum fare that airlines can charge from the passenger.   The routes have been divided in seven sectors based on the approximate duration of the flight.  For routes with shortest duration (for example, Delhi to Chandigarh), the minimum and maximum fare will be Rs 2,000 and Rs 6,000, respectively.  For routes with the longest duration (for example, Delhi to Thiruvananthapuram), the minimum and maximum fare will be Rs 6,500 and Rs 18,600, respectively. 

Further, the Ministry announced that all operational routes under the Regional Connectivity (UDAN) Scheme with up to 500 km of length or operational routes in priority areas (North East region, hilly states or islands) are permitted to resume operations.  This is in addition to the one-third capacity of operations announced earlier. 

Health

Guidelines for international arrivals issued

The Ministry of Health and Family Welfare issued guidelines for international arrivals.  All travellers are required to give an undertaking that they will undergo a 14-day mandatory institutional quarantine at their own cost (7 days in institutional quarantine followed by a 7-day isolation at home).  In emergency cases (such as pregnancy or death in the family), home quarantine will be permitted.  Use of Aarogya Setu app will be mandatory in such cases.  Only asymptomatic passengers will be allowed to board (flight/ship) after thermal screening.  On arrival, thermal screening will be carried out for all passengers.  The passengers found to be symptomatic will be isolated and taken to a medical facility. 

Movement of migrant labourers

Supreme Court gives an interim order regarding problems of migrant labourers

The Supreme Court of India took cognisance of the problems of migrant labourers who have been stranded in different parts of the country.  In its order, the Court observed that there are lapses being noticed in the process of registration, transportation and in providing food and shelter to the migrant workers.  In view of these difficulties, the Court issued the following interim directions:  

  • Free of cost food should be provided to the migrant workers who are stranded at different places in the country by the concerned state governments.  This information should be publicised and also notified to workers when they are waiting for their turn to board the train or bus.
     
  • The states should speed up the process of registration of migrant workers and provide help desk for registration.  Complete information regarding the modes of transport must be publicised to the workers.  
     
  • Fare should not be charged from migrant workers for travel by train or bus. The railway fare shall be shared by the states as per their arrangement.  The originating state of travel must provide water and meal during transportation.   In case of a train journey, Railways must provide water and meal during the journey. 
     
  • After the migrant workers reach their native place, the receiving state must provide health screening, transport and other facilities free of cost. 
     
  • Migrant workers found walking on highways or roads must be provided transportation to their destination and all facilities including food and water.

The Court directed the central and state governments to produce record of all necessary details such as the number of migrant workers, the plan to transport them to their destination, and the mechanism of registration. 

Other measures

PM CARES Fund included in the list of CSR eligible activities

The Ministry of Corporate Affairs notified the inclusion of PM CARES fund in the list of activities eligible for Corporate Social Responsibility (CSR) under the Companies Act, 2013.  Under the Act, companies with net worth, turnover or profits above a specified amount are required to spend 2% of their average net profits in the last three financial years towards CSR activities. This measure will come into effect retrospectively from March 28, 2020, when the fund was setup

For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.

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