COVID-19: Using cash transfers to promote social security for all

cash transfer

On Friday, April 3, 2020, the Indian government launched one of the world’s largest ever cash transfer scheme. This scheme included deposits of over Rs. 30,000 crores into the accounts of women Jan Dhan account holders. Rs. 5,000 crores were also deposited into the accounts of households with LPG connections under the Ujjwala scheme benefitting nearly 8 crore poor households across India. 

On the first day of the Jan Dhan transfer, over 4 crore women account holders received a deposit of Rs. 500 each into their accounts. All eligible accounts are set to receive the funds by the government by April 9th, 2020. 

This mega exercise was carried out based on the last digit of the holder’s account number. This transfer scheme led to several thousand account holders visiting their bank branches and nearest ATMs, although business correspondents have been pressed into service to ensure door-step delivery of benefits. 

While the banks were prepared to handle the sudden spike in activity and had made appropriate arrangements for orderly en masse withdrawals, there were instances of overcrowding. However, some branches also faced increased pressure since pensioners were also coming to collect their pensions. 

Similarly, the transfer of funds for the purchase of three free cooking gas cylinders for the month of April has also begun. State-run fuel retailers are ordered to transfer the funds to eligible beneficiaries between May 4th, 2020 and June 4th, 2020. The fund will be transferred in advance such that the beneficiaries can buy LPG cylinders without having to worry about their financial restraints. These deposits are all part of the 1.7 lakh crore mega COVID-19 relief package announced recently by Finance Minister Smt. Nirmala Sitharaman. 

The Ujjwala consumers are given the option of getting three regular refills of 14.2 kg or opt for up to eight cylinders of 5kg, which is commonly referred to as a ‘Chottua’ cylinder. In case an Ujjwala consumer does not avail the benefit of the three cylinders by June, the money can also be used to buy a refill valid up to March 2021.  

According to the Minister for Petroleum and Natural Gas Dharmendra Pradhan, the Ujjwala scheme has established itself as a major vehicle of social change and will again emerge as a key player in India’s fight against coronavirus as a result of the new measures taken by the government. He conveyed the same to the ground leaders implementing the scheme as he began a sequence of interactive sessions through video conference with over 700 ‘District Nodal Officers (DNOs)’.

The Minister has also instructed officers of Indian Oil, Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) to ensure that the deliveries of the free cylinders to Ujjwala beneficiaries does not affect the overall supply chain across the country. The three major government fuel retailers in the country, namely- IndianOil, Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) are now delivering 60 lakh cylinders daily or 15% more than their usual deliveries.

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