Centre Should Formulate Scheme to Compensate Unorganised Sector Workers during COVID-19, Plea in Supreme Court

April 15,2020

by Ishan Seth

A plea has been filed by Advocate R. Subramanian in the Supreme Court seeking a direction to the Centre to formulate a scheme for compensation for the losses of the workers of unorganised sector due to COVID-19 lockdown.

The plea also states that the Government should implement the scheme throughout the states and union territories. According to the plea the compensation should be 100%.

It is stated that Fiscal Responsibility and Budget Management (FRBM) Act restricts excess spending by the Union over its expenditure. Section 4(2) of the FRBM allows exceptions in case of national calamities, and Section 4(3) limits the waiver in this regard.

It is stated that due to the lockdown the unorganised sector has suffered huge losses. Therefore the Court should suspend the operation of Section 4(3) of FRBM Act at least for Fiscal year 2020-21 to enable the Union to do its duty to support the states with necessary funds and not to be constrained by FRBM limits.

The plea also states that revenue sources of states have collapsed due to the lockdown, as even the sin tax revenue from tobacco and liquor are not available.

Lastly, it is stated in the plea that Government notifications mandating that salaries and wages should not be withheld for periods of absence due to lockdown is enough evidence to show that even the Union is aware that loss of income should not be forced on the persons denied right to work during the lockdown.

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