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New Delhi, Mar 26: Finance Minister Nirmala Sitharaman on Thursday announced a Rs 50 lakh insurance cover for healthcare workers who are at the forefront of dealing with coronavirus pandemic.

Sitharaman said the government has finalised an economic stimulus package to deal with the impact of 21-day countrywide lockdown to prevent spread of the virus.

“It’s only 36 hours since the lockdown has been imposed. Now we have come with a package which immediately take care of the welfare concerns of the poor and suffering workers and those who need immediate help,” Sitharaman said.

She also said that 80 crore poor people, nearly two thirds of the population  will get five kg of rice or wheat per month for three months, in addition to the 5 kg they already receive, for free."

The rationcard holders can take the foodgrains and pulses from the Public Distribution System (PDS) in two installments, she added.

"This measure will ensure no gareeb (poor) remains hungry," Sitharaman said.

The package will include cash transfer and food subsidy, she said.

"Farmers who currently receive Rs 6,000 annually, will be given the first installment of the next financial year immediately. 8.7 crore farmers will benefit from it," said Sitharaman.

As many of 20.5 crore women Jan Dhan Account holders will get Rs 500 per month for next three months to run their households.

For poor senior citizens, widow and disabled will get an ex-gratia of Rs 1,000.

Also, the daily wage under MNREGA has been increased to Rs 202 a day from Rs 182 to benefit 5 crore workers.

The minister said the government will front-load Rs 2,000 payment to farmers in the first week of April under the existing PM Kishan Yojana to benefit 8.69 crore farmers.

Also, the beneficiaries of Ujjwala LPG scheme will get free cooking gas for the next three months, she said.

This forms part of the Rs 1.70 lakh crore Gramin Kalyan Package.

Prime Minister Narendra Modi last week had constituted a task force headed by the Finance Minister to work out package for economy hit by coronavirus.

Munbai/New Delhi, May 4: India expects bad debts at its banks could double after the coronavirus crisis brought the economy to a sudden halt, a senior government official and four top bankers said.

Indian banks are already grappling with 9.35 trillion rupees ($123 billion) of soured loans, which was equivalent to about 9.1% of their total assets at the end of September 2019.

"There is a considered view in the government that bank non-performing assets (NPAs) could double to 18-20% by the end of the fiscal year, as 20-25% of outstanding loans face a risk of default," the official with direct knowledge of the matter said.

A fresh surge in bad debt could hit credit growth and delay India's recovery from the coronavirus pandemic.

"These are unprecedented times and the way it's going we can expect banks to report double the amount of NPAs from what we've seen in earlier quarters," the finance head of a top public sector bank told Reuters.

The official and bankers declined to be named as they were not officially authorized to discuss the matter with media.

India's finance ministry declined to comment, while the Reserve Bank of India and Indian Banks' Association, the main industry body, did not immediately respond to emails seeking comment.

The Indian economy has ground to a standstill amid a 40-day nationwide lockdown to rein in the spread of coronavirus cases.

The lockdown has now been extended by a further two weeks, but the government has begun to ease some restrictions in districts that are relatively unscathed by the virus.

India has so far recorded nearly 40,000 cases of the coronavirus and more than 1,300 deaths from COVID-19, the respiratory disease caused by the coronavirus.

'RIDING THE TIGER'

Bankers fear it is unlikely that the economy will fully open up before June or July, and loans, especially those to small- and medium-sized businesses which constitute nearly 20% of overall credit, may be among the worst affected.

This is because all 10 of India's largest cities fall in high-risk red zones, where restrictions will remain stringent.

A report by Axis Bank said that these red zones, which contribute significantly to India's economy, account for roughly 83% of the overall loans made by its banks as of December.

One of the sources, an executive director of a public sector bank, said that economic growth had been sluggish and risks had been heightened, even ahead of the coronavirus crisis.

"Now we have this Black Swan event which means without any meaningful government stimulus, the economy will be in tatters for several more quarters," he said.

McKinsey & Co last month forecast India's economy could contract by around 20% in the three months through June, if the lockdown was extended to mid-May, and growth in the fiscal year was likely to fall 2% to 3%.

Bankers say the only way to stem the steep rise in bad loans is if the RBI significantly relaxes bad asset recognition rules.

Banks have asked the central bank to allow all loans to be categorized as NPAs only after 180 days, which is double the current 90-day window.

"The lockdown is like riding the tiger, once we get off it we'll be in a difficult position," a senior private sector banker said.