Jharkhand economy estimated to contract by 6.9 percent in 2020-21

Economy: Despite recording a 6.7 percent growth in its GDP in 2019-20 Jharkhand’s real GDP is estimated to contract by 6.9 percent in the current financial year FY 2020-21.

In the Economic Survey prepared by the Centre for Fiscal Studies (a state government think tank), and tabled by the state government in the assembly, the provisional state GDP in 2018-19 stood at INR 2.24 lakh crore. This grew to INR 2.4 lakh crore in 2019-20. The estimated contraction this year will bring the state’s GDP back to its 2018-19 level.

The pandemic has left its impact on the state in multiple ways. Unemployment rose to a peak 59.2 percent in May 2020; this however decreased gradually to 11.3 percent in January 2021—almost similar to the 10.6 percent unemployment rate witnessed last year in January 2020.

Healthcare was an area of concern as well, with 66 percent ‘out-of-pocket health expenditure’ incurred by the people in 2020-21. The survey stated that given the poor infrastructure and inadequate manpower at public health facilities, there was an increasing dependence on the private sector. And in the absence of health coverage schemes, people paid for this private healthcare largely through household savings and borrowings.

On rural development front, the survey highlighted that the number of houses supposed to be constructed under Pradhan Mantri Awas Yojna-Gramin (PMAY-G) had fallen short by more than 40 percent since the scheme began in 2016-17. In the ongoing financial year, against the target of 4.22 lakh houses, only 33,604 were completed despite 3.33 lakh houses being sanctioned.

Read this article on why India won’t be able to improve its economy or develop sustainably unless it reduces gender and income inequality.

Fundraising & Communications: The Ministry of Home Affairs (MHA) has issued a circular extending the validity of FCRA registration certificates to September 30th, 2021. This applies to all FCRA licences that have expired or will expire between September 29th, 2020 and May 31st, 2021. The decision to extend the deadline has been driven by the exigencies arising from the COVID-19 situation.

FCRA refers to the Foreign Contribution (Regulation) Act 2010, which permits charitable organisations based in India to raise funds from foreign sources.

The order also clarified that nonprofits that have already opened an account and have the requisite permission to receive foreign aid, can henceforth receive it only in these newly-opened accounts.

The FCRA law was amended in September 2020 to include a clause that mandated that all nonprofits receiving foreign aid must necessarily open an account in State Bank of India’s New Delhi Main Branch. The government had initially set the deadline for this account opening as March 31st, 2021; it later extended it to June 30th, 2021 after several nonprofits argued in court that there had been delays because necessary approvals from MHA had not been received.

Several organisations have not been able to receive foreign funds during the crisis caused by the second wave, and this has impacted their COVID-19 relief efforts. Relaxing the foreign funding rules could significantly help organisations ramp up their operations to help individuals, supply critical healthcare equipment, and respond to communities in rural areas.

Read this article to know how amending the FCRA can have unforeseen implications.

Philanthropy & CSR: The Ministry of Corporate Affairs (MCA) has issued a circular that allows corporate spending on health infrastructure for COVID-19 care to qualify as corporate social responsibility (CSR) expenditure.

This includes setting up medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment to counter COVID-19.  

The announcement comes at a time when all efforts are being directed towards expediting efforts to support the country’s healthcare infrastructure.

According to the circular, companies can now undertake projects and activities in collaboration with other companies using CSR funds. Additionally, they can contribute to specified research and development projects, as well as publicly funded universities and certain organisations that conduct research in science, technology, engineering, and medicine.

The government had earlier clarified that setting up makeshift hospitals and temporary COVID-19 care facilities would also be considered a CSR activity. Rajesh Verma, the Corporate Affairs Secretary, has requested businesses to consider converting vacant office buildings into COVID-19 facilities to cater to the rapidly increasing caseload.

Read this article to understand why media attention on COVID-19 deaths due to lack of oxygen in big cities has skewed donor priorities.