Tackling COVID-19 induced economic crisis in developing nations like India

I am not an economist, and my understanding of macroeconomics is limited. Nonetheless, I have a proposal for developing economies (particularly India) regarding how to reduce the economic crisis caused by COVID-19. The one-sentence summary would be “Universal Basic Income using a parallel currency that has more restrictive usage than the conventional currency”. Read on for details…

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1. I do mean universal, so there are no checks to assess whether a person is eligible for the scheme (like employment status, income level, wealth status, etc.). This is to avoid bureaucratic delays and corruption. The amount I propose is 5,000 rupees per month. This will be given to every adult in the nation, after they present Aadhar card (or any nationalized ID that is known to have low incidence of forgery). The money can be collected from any government bank or post office. Having a large number of places from which the money can be received is essential to avoiding long lines and crowded situations. The issuing of this income can be tracked through a central online database.
2. I do mean parallel currency. The currency notes should physically look different from the conventional currency. Since my proposal is definitely challenging to implement, the government in charge needs motivation to follow through. My suggestion would be to use the picture of Narendra Modi on this parallel currency, since all leaders (including Modi) are incentivized by the idea of leaving a lasting positive legacy. Saving India from economic collapse would make Modi the greatest leader in the history of independent India. For those concerned about the virus spreading because of this physical currency: (a) there is very little evidence (if any) of surface transmission playing a significant role in infecting people (as opposed to merely spreading the virus), and (b) all you have to do is use hand sanitizer or wash your hands after handling currency and before touching your face.
3. Now for the restrictive usage, which is essential for avoiding (or at least limiting) inflation. The most important restriction is that this parallel currency cannot be deposited in the bank, cannot be exchanged for regular currency, and cannot be exchanged for foreign currency. The reason for this restriction is that the parallel currency is meant to stimulate the economy, and under no circumstance should it be used to create long-term savings. The parallel currency can be exchanged for goods, as long as the goods were manufactured in India and do not include any imported components. It can also be exchanged for services provided by individuals who are Indian citizens and for services provided by businesses that do not include any foreign investment. These restrictions are placed to prevent any disruptions to trade relationships that India has with other countries. The usage envisioned is for people to buy food, pay utilities (e.g., electricity and phone bills), and hire help (e.g., maids, electricians, plumbers). It is not meant for buying non-essential items like electronic goods.

While the universal basic income as described above will help tremendously, there are two more ideas that are essential to protecting citizens from the economic fallout of COVID-19. These two ideas are much more difficult to implement, and much more prone to fraud. Nonetheless, they need to be implemented to protect people. Unlike universal basic income, these two provisions are not universal and will require evidence assessment before the money is handed over.

1. Rent and mortgage relief: The evidence needed will include (i) six months of receipts of payment for rent/mortgage, (ii) letter from the landlord (for rent) or bank (for mortgage) confirming that the person still lives at that address, and (iii) letter from the employer that the person has been dismissed from their job because of COVID-19. As you can see, producing this evidence is non-trivial, but without at least this level of evidentiary basis, fraud will be rampant. The relief will be provided using the parallel currency, remitted directly to the landlord or bank. There will be a cap of 20,000 rupees per month for families and 10,000 rupees per month for individuals. Unlike universal basic income, whose biggest beneficiary will be the poorest people, the rent and mortgage relief is aimed at the lower middle class. The poor in India typically have a home in their village, and the upper middle class and rich in India do not live in rental properties and own their apartment/home outright (no mortgage).
2. COVID-19 medical expense relief: The evidence needed will include an itemized bill from the hospital where the patient was treated. This scheme is not applicable for those who have health insurance. For every possible COVID-19 related item on a medical bill, the government will provide a base price. Reimbursements will be processed using this price chart. This will prevent privately owned hospitals from price-gouging, and it will prevent people from going to the more elite hospitals for something that can be accomplished in a government hospital or a relatively affordable private hospital. The reimbursement will be made directly to the hospital by using parallel currency.

I know what I have proposed is not easy to enact, but I believe the government can achieve this with enough pressure from citizens. A huge reason why the poor people are going outside in crowded situations is because they are faced with the impossible choice of dying from hunger and dying from COVID-19. Any individual or business is prohibited from discriminating against a person who is trying to use the parallel currency within the restrictions that I have explained above. This is needed to prevent the parallel currency users from receiving inferior service or even being denied service. The government must keep track of all the parallel currency it issues in an itemized manner (basically a ledger where one column is the monetary amount and the other column is the recipient). This ledger must be a document of public record. Once the infrastructure I have proposed above is put in place, the universal basic income scheme (but not the rent/mortgage relief and not the medical expense relief) can continue indefinitely. This will undoubtedly improve the lives of the poorest in society.

If you disagree with the logic of what I have proposed, please comment below. Please refrain from comments suggesting that this is not achievable. Cynicism is a luxury of the middle class. Without the government taking massive initiatives along the lines of what I have suggested, the situation a year from now will be so awful that it will make the human tragedy seen so far with respect to migrant workers seem like a fairy tale in comparison. Allow this fear to spur you into action.