[COVID-19] Plea In SC Seeks Direction To Centre To Formulate Scheme To Compensate Poor Workers In Unorganised Sector[Read Petition]

Emphasizing that there are innumerable people in the unorganized sector who are dependent on daily work to earn their living, it is submitted that the Government is responsible to ensure such people are provided with financial assistance during these unprecedented times.

The petitioner, an IITian and MBA graduate from IIM who is a practicing advocate, has specified that his plea is regarding people in the informal sector who were either self-employed or quasi self-employed and have lost all means of income and are thus in need of assistance. The petitioner throws light on this category of people as follows-

"These are not people who are homeless or in penury otherwise but are all people bravely leading lives by sheer dint of their own effort and earning a livelihood to support themselves and their families. Such people have not needed to depend on the freebies of the governments as they have proudly earned their incomes and met their needs therefrom. Many of them especially in urban areas may not even come within the ambit of the National Food Security Act. The lockdown has completely denied all income earning opportunity to such persons and left them totally income less."

The petition clarifies that while the government has made efforts to ensure salaries are paid during lockdown and has tried to provide support to farmers and other economically weak sections, such directives can only be implemented in the organized sector. Referring to the notification that salaries and wages must not be withheld due to absence during the lockdown, it is urged that the Government is also of the view that those who have been denied the Right to work during this time must not be forced to lose income as well.

"The same can in no manner be enforced for people in the unorganised sector as many do not have concept of a owner/employer and in other cases even the so called employers of such persons, say a puncture shop owner is not in a much better position economically than his assistant whose wages he is supposed to ensure."

In this light, it is urged that the economic loss suffered by those who cannot afford it may be mitigated, at least partly, and the Centre and States be directed to formulate a scheme "to meet the minimum economic requirements of each such person which cannot be limited to supply of foodgrains."

However, it is agreed that States and Union Territories, who are the eventual agents responsible for delivering social welfare services, are also facing extreme financial strain. The petitioner further concedes that it is impractical to expect States to finance the reimbursement of the unorganized sector while they themselves have lost large amounts of revenue due to the cessation of economic activity post lockdown. Thus it is additionally prayed that the Centre, "as the ultimate sovereign", be directed to compensate all States for all the loss of revenue incurred as well as to reimburse all COVID-19 related expenditures incurred by them.

Given the financial burden being faced due to this unprecedented crises, the Top Court has also been requested to suspend the operation of the Fiscal Responsibility and Budget Management Act (FRBM) for the Financial Year 2020-21. Specifically alluding to Sections 4(2) and 4(3), the petitioner iterates that FRBM mandates the Centre not to be reckless or wasteful of its financial resources and places various restrictions on spending towards this end. "In simple terms FRBM restricts excess of spending by the Union over its expenditure. While proviso to Section 4(2) of FRBM allows exceptions in case of national calamity Section 4(3) limits the waiver in this regard also."

Though FRBM allows for very slight deviation from the fiscal deficit targets of the Government on exceptional grounds such as national security, act of war, national calamity and others, the petitioner contends that this is not a situation that can be placed on the same footing as those grounds. Thus, it is urged that, to enable the Central Government to carry out its duty and support States in supporting and empowering its people, FRBM must be suspended.

"Lockdown of all business activity on such scale as presently is unprecedented and as such the constraints under Section 4(3) of FRBM have to be wholly suspended atleast for Fiscal year 2020-21 to enable the Union to do its duty to support the states with necessary funds and not be constrained by FRBM limits."

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