India’s Ministry of Finance has released an amount of $1.2 billion to 25 states to provide grants to rural local bodies to augment the resources to be utilised for various prevention and mitigation measures needed to combat the COVID-19 pandemic. The ministry said in a statement that the amount is to be allocated to local representatives of villages, blocks, and districts.
Sharing his views on the grants released by the Indian government, veteran economist and former Professor at Jawaharlal Nehru University Dr Arun Kumar told Sputnik: “The situation is already too grim and the grants won’t give immediate relief. The government should have acted proactively. Secondly, the amount of $1.2 billion is too less for thousands of villages in India. Given the scale the pandemic is spreading across the villages, the amount will not be sufficient. Therefore, far more needed to be done, like scaling up health facilities in the rural areas, ramping up testing centres, setting up isolation centres, and moreover creating awareness about the pandemic, precautions against it and prevention”.
However, another economic expert, Shri Ram Shaw, welcomed the release of the grants. “At a time when India is grappling with the second wave of COVID-19, with the infection hitting rural India too, releasing of grants of almost $1.2 billion by India’s Finance Ministry will be of great help in combating the pandemic and mitigating the problems of the people”, Shri Ram Shaw told Sputnik.
“Funds may be used by rural local bodies (RLBs) for various prevention and mitigation measures needed to combat the COVID-19 pandemic. It may be used by the states for various measures related to containment of COVID-19, including meeting the cost of oxygen generation and storage plants in hospitals, ventilators, air purifiers, strengthening ambulance services, COVID-19 hospitals, COVID care centres, consumables, thermal scanners, personal protective equipment, testing laboratories, testing kits, containment zones, etc.”, he added.
The Indian state of Maharashtra, which has been the worst hit, has been granted $116 million, while another Indian state, Uttar Pradesh, which has suffered the most during the second wave, has been given $200 million.
The statement released by the Indian ministry said that the grant was to be released on 1 June 2021, but looking at the current COVID-19 situation, the 15th Finance Commission and Panchayati Raj Ministry of India recommended the Finance Ministry to release it in advance of the normal schedule.
Apart from this, the commission also waived off certain conditions, including the online availability of accounts of a certain percentage of RLBs in the public domain, for the release of untied grants. A recent study prepared by economists at the State Bank of India flagged the “worrying trends” as the share of rural areas in new cases had increased to 48.5 percent in May, compared to around 37 percent in March. Currently, India is registering around 400,000 new COVID-19 cases on a daily basis.