What is Pradhan Mantri Garib Kalyan Yojana 2020 (PMGKY)?


On Tuesday, June 30, 2020, PM Narendra Modi addressed the nation through television and explained what steps the government has taken to deal with the impact of COVID-19 in India and announced to extend the PM Garib Kalyan Anna Yojana till the end of November, i.e. for the next 5 months including the Indian festivals of Chhat Puja and Diwali.

According to PIB, the scheme will benefit over 80 crores poor population of India with 5kg rice or wheat and 1kg pulses for free per month during the critical lockdown period. According to him, the government will spend Rs. 90,000 Cr. for the expansion of this scheme.

He also said that the government has taken certain decisions including timely lockdown to save millions of lives in the nation. Since we have entered the phase of Unlock 2, he warned everyone to take proper precautions and maintain social distancing to prevent the spread of the virus.

On March 26, 2020, with the wake of COVID-19, PM Narendra Modi announced Pradhan Mantri Garib Kalyan Yojana (PMKGY) which is worth a whopping Rs. 1.7 Lakh Crore to overcome the financial burden on the needy and poor due to lockdown. If you don’t know about Garib Kalyan Yojana, read on to know major highlights announced by the Finance Minister Nirmala Sitharaman.

In order to make India a self-dependent country, the Government of India has also announced Atma Nirbhar Bharat Abhiyan, a relief package of Rs. 20 Lakh Crore in COVID-19 lockdown. EPF relief would be provided for all establishments for Rs. 2500 Cr. as liquidity support.

The PM Garib Kalyan Yojana was launched in 2016 by the Government of India. It gives the opportunity to income taxpayers to declare their illegal money and forgo prosecution.

With this scheme, people with undisclosed income in the form of deposit in any account having a particular entity (post office, banks, etc.) or cash with an opportunity to disclose their income and pay surcharge, tax, and penalty in total to 49.9% of that income. In addition, those people have to deposit at least 25% of undisclosed income to the PMKGY scheme, 2016 which has been notified separately by the Department of Economic Affairs.

Finance Minister Nirmala Sitharaman has announced the Garib Kalyan package as part of Corona relief to the poor and needy, which includes the following:

  • Provision for bank branches opening.
  • The state governments have been ordered by the central government to use Rs. 31000 Crores to relieve building and construction workers.
  • Cash will be transferred to the migrants and poor workers through PMGKY 2020.
  • The Pradhan Mantri Garib Kalyan Yojana 2020 (food scheme) has benefitted over 80 Crore people. In addition, the government will provide 5kg rice/wheat for free along with 1kg of the pulse (any) to each household till the end of November.
  • Each healthcare worker will get the cover of medical insurance of Rs. 50 Lakh.
  • Farmers are getting Rs. 6000 every year through PM-Kisan yojana. Now, the government will provide the first installment. More than 8.69 Cr. farmers will be benefited from this scheme quickly.

About PM Kisan Samman Nidhi Yojana

The government is expecting to help up to 13.62 Cr. families by increasing wages through MNREGA scheme. Each worker will get an extra income of Rs. 2000.

  • The Direct Benefit Transfer (DBT) will be transferred in cash in a total of 8 parts, including MNREGA, farmers, poor pensioners, widows, women who are benefited under Jan Dhan Yojana, divyang, households and women under Ujjwala Scheme, organized sector employees under EPFO, self-help women groups along with those under livelihood mission, district mineral funds and construction workers.
  • Poor seniors, Divyangs and widows will be offered with Rs. 1000 for the next three months.
  • The collateral-free loans have been doubled by the government from Rs. 20 lakh to Rs. 63 Lakh SHGs to help more than 85 crore households.
  • BPL population includes over 8.3 Crore families who will be eligible for free gas cylinders for the next 3 months.
  • The employer and employee will get EPF contribution (12% each) from the government for the next three months. This scheme is mainly for businesses with a maximum of 100 employees where 90% of employees get salary within Rs. 15,000.
  • The regulation of EPFO scheme will be changed for the organized sector to enable 75% of non-refundable advance as the credit to the worker or wages of three months, whichever is lower. It is expected to help over 4.8 Cr. workers registered with EPF and can withdraw funds.

Since the government has extended the scheme till August 2020, according to FM Nirmala Sitharaman, the contribution of EPF shall be 10% for both employers and employees each for the next 3 months instead of the mandatory limitation of 12%.

She also added that the contribution of 12% will remain the same for state PSUs and public sector companies. In such PSUs, employees will have to pay just 10%. The government has taken a lot of measures to deal with the effect of COVID-19 lockdown and make India self-reliant.

There are over 20 Crore women with Jan Dhan accounts who will get Rs. 500 per month as a favour amount for the next 3 months for their household affairs. In addition, the scheme has been effective quickly and people started getting the above benefits since April 1, 2020.

On the second day of lockdown, the finance minister has announced these Garib Kalyan plans for the needy and poor in order to help them deal with the financial distress.

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