Mineral Laws (Amendment) Act, 2020

Reading time: 8-10 minutes.

India produced 729 million tonnes of coal in the year 2018-19. Despite these numbers and economic growth, the quantity of imports have increased indicating that the country’s massive domestic reserves are not being utilised properly. To combat this, the Rajya Sabha recently passed the Mineral Laws  (Amendment) Act, 2020 on March 12th, which alters the existing Mines and Mineral (Development and Regulation) [MMDR] Act, 1957 and Coal Mines (Special Provisions) [CMSP] Act, 2015. The MMDR Act regulates the overall mining sector in India. The CMSP Act provides for the auction and allocation of mines whose allocation was cancelled by the Supreme Court in 2014. Under this amendment, the Environment Ministry has allowed the lessees to mine for two years before getting fresh environmental clearances for mining.

Companies with no prior experience in coal mining, along with companies in other nations as well, have now been allowed to participate in auctions for coal/lignite blocks. These highlight features of the amendment are aimed at promoting ease of doing business and ensuring continuous supply of minerals to industries, both of which shall eventually reduce the import quantities eventually. These changes will also lead to an increase in participation and will facilitate implementation of the FDI policy in this sector.

Since coal is responsible for 72% of the power generated in India and is also the basic building block for manufactured products and many agri-inputs, it is safe to say that this industry plays a pivotal role in ensuring raw material and energy security for the nation. Hence, this is a positive step towards improving the general economic condition of the nation after it was hard by the current pandemic.

Salient features of the Bill

Apart from the highlighted features mentioned above, this amendment also makes other significant changes. All of the changes have been listed below:

  1. Presently, companies purchasing coal mines under Schedule II and Schedule III through auctions may only use the coal extracted for particular end-use purposes such as power generation and steel production. The Amendment lifts this constraint on the use of coal mined by these companies. Companies will be permitted to carry out coal mining operations for their own use, sale, or for some other reason, as the central government can decide. They can also use this coal at the plants of their subsidiaries.
  2. The Amendment clarifies that to participate in the auction of coal and lignite blocks, companies do not need to have previous coal mining experience in India. In addition, the preferential bidding process for auctioning coal and lignite blocks does not extend to mines considered for allocation to firstly, a government company or its joint venture for own use, sale or any other defined purpose; and secondly, a company which has been awarded an electricity project on the basis of a competitive tariff offer.
  3. Presently, to prospect and mine coal, two licences are provided, known as prospecting and mining licence respectively. However, a third type of licence is added by this amendment which includes the lessee to prospect and mine coal, called the prospecting license-cum-mining lease.
  4. The holders of non-exclusive reconnaissance permits for the discovery of identified minerals do not currently have the ability to acquire a prospecting license or mining lease. Reconnaissance operations include initial prospecting of a mineral by certain surveys. The Amendment provides that holders of these permits can apply for a license-cum-mining lease or mining lease for prospecting purposes. This clause shall extend to all licensees as laid down in the Amendment.
  5. Upon expiry, mining leases for specified minerals (minerals other than iron, lignite, and atomic minerals) will usually be passed to new people by auction. These new people are expected to obtain statutory clearances before mining operations commence. The Amendment specifies that for a term of two years, the various permits, licenses and clearances granted to the previous lessee shall be transferred to the effective bidder.
  6. In some cases the CMSP Act allows for the termination of coal mining allotment orders. The Amendment adds that these mines may be reallocated by auction or allocation as the central government can decide. A designated custodian would be named by the central government to oversee those mines until they are reallocated.
  7. State governments need prior central government approval under the MMDR Act to issue recognition permits, prospecting licenses, or coal and lignite mining leases. The amendment specifies that, in certain situations, prior central government approval would not be necessary to issue certain coal and lignite licenses. Those include situations where, firstly, the central government has made the allocation, and secondly, the federal or state governments have reserved the mining block for the protection of a resource.
  8. At the expiry of the lease term, mining leases for listed minerals (minerals other than iron, lignite, and atomic minerals) are auctioned under the MMDR Act. The Amendment provides that prior to its expiry, state governments can take advance action to auction a mining lease.

Reasons behind introduction of the Bill

In September 2019, the Government of India started the process of liberalizing the long-standing restrictions imposed on mining activities in India by enabling 100% foreign direct investment (FDI) in coal mining operations to be sold. Nevertheless, the Coal Mine Act, 2015 (Coal Mines Act) and the Mines and Minerals Act, 1957 (MMDRA) continued to include end-use limits on minerals mined from a large number of coal mines, which did not bode well for attracting investment.  In addition, firstly, reduced demand for power from conventional sources; secondly, decreased growth in the cement, iron and steel sectors; and thirdly, approval processes resulted in a scenario where, even if mines were allocated, mineral extraction would be limited and the development of mines stagnated. By way of the Mineral Laws (Amendment) Act, 2020, amendments were made to the Coal Mines Act and the MMDRA in order to address the same and to provide operational flexibility for persons engaged in mining.

Pralhad Joshi, minister of coal and mines said the bill was necessary as India would use its own natural reserves, rather than importing Rs 2.7 lakh crore-value coal. “We need to produce coal and reduce imports,” he said adding more domestic production would lead to more generation of electricity and cut bills for oil imports as well. “The amendments would open up new growth areas in the industry,” he added. The law would introduce a “sea shift” in the industry Joshi said. The stress should be on reserve exploitation, without harming the environment. The government is proposing to kick-start this month’s commercial coal mining auction process, with release of bid rules and stakeholder consultations.

The minister said Coal India was tasked with producing one billion tons by 2023-24 but output will still fall short of demand and private players need to be introduced into coal mining. Joshi also said the amendment would help in gaining further interest in coal block auctions. In addition to mining majors such as Peabody, BHP Billiton and Rio Tinto, the Government plans to draw investments from other Indian and global corporations too. For commercial coal mining auctions that the Center expects to conduct in the near future, the passage of this act is considered necessary. The automatic transfer of environment and forest clearances for iron-ore mines authorized by this legislation is intended to ensure domestic industry supplies of raw materials.

Critical analysis

Major Concerns about the Amendment itself:

No guarantee is provided that these amendments will allow large multinational miners to invest in India’s coal sector. This may be because pricing is not obvious. Few will be able to invest trillions of dollars in the new mining technologies without a remunerative offer. On top of that, miners actually have to pay large sums in order to get a mine after winning an auction. Regardless of this, auction bidders just don’t exist. Coal also has a ‘dirty fuel’ stigma and only a few multinational lenders are willing to put their money into the field.

Other Relevant Concerns:

  1. Although many countries are moving away from fossil fuels, especially coal, to fight climate change, India is stepping up its demand in this field, putting the environment in danger.
  2. It allows for an increase in rivalry in the mining industry, paving the way for increasing chances of resource overexploitation.
  3. Fostering the development of the coal sector is jeopardizing India’s Paris Agreement commitments.
  4. There are also health issues with mining sector growth as carbon-burning releases particulate matter, sulfur dioxide, nitrogen dioxide, and mercury, and this will endanger the health of people living in the region.
  5. Private businesses have a tremendous potential to compromise labor standards to increase their income and increased production costs. It can impact employee safety and wellness.

Probable future of the Bill

During the course of the most recent couple of years, exploration by private players has almost reached a stand still. Interventions, for example, introducing a seam­less transition from exploration to mining license, permitting the offer of license at any stage, and allowing private companies to proactively approach administration of India for exploration areas will help over­turn this pattern.

Streamlining the auction procedure will likewise prompt more prominent efficiency and increasingly effective outcomes.

Min­ing companies in India are subject to a lot of higher financial demands than different nations, (because of high royalty rates, multiplicity of duties and double taxation). Thus, royalty rates ought to be reduced in accordance with international benchmarks.

The government should ascertain that all policy interventions take cognisance of rising worldwide patterns in mining, for example, savvy mines, remote ocean mining and the changing composition of the mining workforce.

Conclusion

The amendments are an appreciated step towards the progression of the mining part and attracting the genuinely necessary outside speculation. While the Ordinance is a positive decision to give operational proficiency, the conforming rules and bidding procedures must be evaluated in detail to guarantee that these liberal steps according to the Ordinance are safeguarded and given full impact. The changed approach will permit worldwide players to search for venture openings which will permit the nation to use their specialized abilities for successful usage of regular assets to support individuals on the loose.

Mineral Laws (Amendment) Act, 2020 is a noteworthy decision towards encouraging simplicity of working together and expanding the commitment of private players in the mining segment. As this additionally advances the development of coal creation inside the nation, it expands coal utilization. This, thus, leads to an upsurge in pollution levels and other detrimental effects on the earth. Hence, steps must be taken to protect the earth while guaranteeing the financial development of the nation.

Author: Kabir Chaturvedi from Rajiv Gandhi National University of Law, Patiala.

Editor: Tamanna Gupta from RGNUL, Patiala.

Government of India Transaction of Business Rules, 1961

Reading time: 8-10 minutes.

In the existing corona times, where businesses are mostly doomed and recession is bound to creep in the economy, Cabinet Secretariat has amended Government of India Transaction of Business Rules, 1961 to widen powers of two committees to meet the economic crisis, using the powers under the Act. The two committees which now enjoy widened scope and powers are the cabinet committee on investment and growth, and the cabinet committee on employment and skill generation. These committees were set up on June 5, 2019, after the Modi Government was re-elected for the second term, in response to growth slow-down and joblessness in the country. Both these committees are headed by the PM itself.

Significance of this development

Rectify the declining exports situation in India:

Earlier the cabinet committee on investment and growth was given a job to identify the various key projects which are needed to be implemented on a time-bound basis requiring an investment of Rs. 1,000 crore and above, particularly in the field of investing and manufacturing. But, now as the government is highly concerned about the declining export situation in the country, the latest amendment has discarded the limit of Rs 1,000 crore and has also included ” sector-specific reforms and other measures aimed at export promotion, import-substitution, accelerating capital inflows, etc.” This will increase the emphasis of the committee on the exports and imports balance of the country to further save her from balance of payments deficit in the times of economic crisis.

Ease of doing business:

The cabinet committee which is responsible for investment and growth will now also work towards ease of doing business which shall include rationalization and simplification of the rules and regulations; action to fast-track requisite approvals and also the implementation of key ongoing as well as new projects, and any other issue relating to boosting investment and growth. This will encourage more start-ups and also many multi-national corporations to set up their industries in India, which again will counter the GDP-drop and joblessness in the country in the wake of countrywide lockdown amid the corona crisis.

Emphasis on women workforce:

 The amended act also calls out the need for a “particular emphasis on women workforce” as they are the most wasted resource of the country. They constitute the biggest chunk of voluntary unemployment due to a number of issues like patriarchal society, unsafe work environment, and needs of family and children, etc. This is the time when the government can make the most use of this valuable wasted resource of the country and come out of the clutches of an economic crisis.

Meeting the emerging requirements of the society:

Earlier the cabinet committee on employment and skill generation worked on the policies, programs, and schemes for skill development and increasing employability of the workforce in the context of “emerging requirements of the rapidly growing economy and mapping the benefits of demographic dividend”. While the amendment has retained the brief of the committee, but it has now aimed at “effectively meeting the emerging requirements of the economy” which will suggest the government on meeting the GDP-drop and unemployment due to the lockdown situation. By changing the context under which the committee works, it will lead to more specialized and focused laws in the wake of lockdown and economic crisis.

Salient features of the act

Comprehensive rules:

 This act covers almost every field of policy-making of the government. Committees on particular areas like economic affairs, parliamentary affairs, appointments, investment and growth, security, etc are made to ensure specialized and better policies. The committees are made on an area as niche as accommodation to ensure clarity and remove any ambiguity in the working of the government. This leads to a smooth channel of communication; increased efficiency in work; and harmonious inter-department relations.

Specific roles assigned to each committee:

Each cabinet committee has been assigned specific roles, laid down in very clear terms and numbers to avoid any ambiguity. Further, authority and responsibility is stated clearly to avoid any inter-department clashes. This ensures a smooth flow of work; avoids ego clashes and leads to a better work environment.

Powerful role of the Prime Minister:

A powerful role has been assigned to the Prime Minister in the Act. He or she can call papers from any department at any point in time. Also, he or she has the power to amend the schedule to add or reduce the number of such committees. The standing committee which again has some very important roles to play is appointed by the prime minister. Ultimately, he or she also has the power to permit or condone a departure from these rules to the extent he or she may seem necessary.

Human Resource Department of the government:

It would not be wrong to call the “Appointment Committee of the Cabinet” the human resource department of the government due to the roles it has to play. The committee is responsible for several empanelment, extension of tenures, inter-cadre deputation and transfer of All India Services officers, extension of services beyond the age of superannuation, the pay scale of various officers and a lot more. The committee is also responsible for inter-company transfers of chairmen and managing directors of the various public sector undertaking and assumes the role of a mediator in case of disputes in the preference of board of meeting or employments on several important posts of the government officials. In short, the committee manages all the aspects of human resources of the government and thus labeled as human resource department of the government.

Rules maintain inter-department harmony:

Also many rules and guideline have been laid down to avoid any inter-departmental issues. Clear rules have been laid in case more than two departments of government are involved to avoid any further clash of powers. For example, in every case, when a decision taken in one department is likely to affect the working of the other department, no decision is taken until all the departments have concurred or at the instance of failing such concurrence, the power to take the final decision rests with the cabinet.

Objectives and purpose of the Act:

Specialized and more focused working of the government:

Each cabinet committee has many specialists working under it, which can analyze the situations and provide indispensable advice to the government. This advice can help in preventing a crisis and also in tacking one. Thus, by creating a cabinet committee for each field of working of the government, it leads to more specialized and focused policies of the government which ultimately leads to better governance.

Harmonious inter-departmental relations:

The act states very specific roles in very clear terms and figures for every department. Rules have been laid out in the case where more than one department is concerned. Thus, this clarity in terms of authority and responsibility, and inter-department relation leads to a smooth flow of communication; no ego clashes; avoids duplicity of work and thus increases efficiency and effectiveness of the working of the government.

A Balance between authority and responsibility:

More authority than responsibility leads to misuse of power, whereas more responsibility than authority acts as a hindrance in the efficient working of any organization. Thus, a perfect balance needs to be struck to ensure smooth working. This act attempts to do the same. It lays out various responsibilities and gives away matching authority to various departments. For example, when Cabinet Committee on Accommodation is given the responsibility to “determine the guidelines or rules and terms of conditions to govern out-of-turn allotment of government accommodation, the act gives the matching authority to decide upon the allotment of government accommodation to various categories of non-eligible persons and organizations and the rate of rent to be charged from them; to consider the question of allotment of accommodation from the General Pool to the Members of Parliament; to consider proposals regarding shifting of existing Central Government Offices to places outside Delhi and the location of new offices in Delhi; etc.”

Critical analysis

  • Certainly, these rules are indispensable to the government as they help in more focused and specialized policies and also ensure harmonious inter-department relations which lead to more effective and efficient government and governance.
  • The rules are laid down in a very clear and crisp manner which leaves little room for interpretations. While it is beneficial in normal circumstances, it can prove to be a little hazardous in special circumstances as it also limits the scope. The rules will have to be time and again amended to accommodate the situations of crisis. Sometimes, committees are also unable to take the appropriate measures to tackle an upcoming crisis due to the limitation of scope and powers.
  • Also, the powers are very much centralized, which means that most of the decisions are taken by upper authority and then passed on to the lower ones. It also means that every task has to go through multiple stages, before getting approved. This may ensure accuracy of work but the same reason is responsible for the delay of important decision making, red-tapism, bureaucracy, and also corruption. The idea of centralization might be a good idea for a small organization, but when it comes to bigger organizations like government, they have to practice decentralization to avoid delay and red-tapism in its working.
  • The rules also help the government in tackling unforeseen circumstances as the prime minister has the power to add or reduce the committees and also the limit or increase the functions of these committees according to the need of the hour. For example, the scope of the cabinet committee on investment and growth has been widened to tackle the situation of declining exports in the country in the wake of a global pandemic crisis.
  • The supervisory role of the cabinet and Prime Minister helps in avoiding any cases of mistakes and corruption. The periodic assessment of these committees also helps them in keeping the workings of these cabinet committees on track.  

Need of reforms

The only need for reform in these rules is the decentralization and dispersal of more power to the lower authorities. Also, the scope of the powers of the committees should increase so that they can take the necessary action as and when required. Additionally, a balance in authority and responsibility of these committees should also be ensured to avoid misuse of power and for the sake of completion of all the necessary tasks on time. While it will avoid red-tapism and delay in decision makings, it will also ensure more efficiency and effectiveness in the working of these cabinet committees.  

Conclusion

Thus, the latest amendment to the functions of the two committees under the Government of India (Transaction of Business) Rules 1961 which came in the wake of a 21-day lockdown to contain the spread of COVID-19, are of immense importance. The rules are modified in a way to tackle the effect of the global pandemic crisis on the domestic economy. These rules which determine the functioning of various cabinet committees, which are made in almost every niche area of policymaking, aids the government in various decisions as well as performs several other indispensable functions. These cabinet committees are very specialized and focused in nature which again contributes to the better policy-making of the government.

The rules are laid out in very crisp and clear terms and figures which avoids any confusion and any possible inter-departmental ego clashes but again at the same time it tends to limit the scope of these committees which can make the situation worse at times of crisis. The only solution of which is to amend the rules, time and again to suit the need of the hour. Also, the Act follows a regime of centralization which can be a little harmful when it comes to delay in decision making, red-tapism and bureaucracy. Thus, a perfect balance needs to be struck between authority and responsibility to avoid misuse of the powers and at the same time avoids any delay in decision making.

Author: Divyani Saldi from RGNUL, Patiala, Punjab.

Editor: Arya Mittal from Hidayatullah National Law University, Raipur.

Policy analysis: PM Bharatiya Janaushadhi Pariyojana

Reading time: 8-10 minutes.

Despite the vast improvement in the government’s healthcare spending over the last 25 years, there has been no respite on steadily rising medical costs in the country. The cost of medicines constitutes a large percentage of the total medical costs of an individual. Over 30-40% of people die due to lack of money to buy medicines. In order to aid the lower class people, the government in 2008 brought the PM Bharatiya Janaushadhi Yojana.

The campaign is launched by the Department of Pharmaceuticals in association with the Central Pharma Public Sector Undertakings, which is aimed to provide quality medicines at affordable prices through dedicated outlets. These stores provide generic medicines at very less price and the potency of these are the same when compared to branded medicines available in markets. It was renamed as Pradhan Mantri Bhartiya Janaushadhi Pariyojana giving further impetus to the scheme in 2016.

Janaushadhi week was celebrated across the country from 1st March to 7th March 2020. During this week, sugar level checkup, blood pressure check-up, free doctor consultation, and free medicine distribution were hosted at the Janaushadhi Kendras. March 7th is commemorated as the Janaushadhi day to create awareness about generic medicines. Prime minister Narendra Modi interacted with the beneficiaries of the scheme and the owners of the Janaushadhi Kendras through video-conferencing. He commended the role of store holders and announced to introduce awards to recognize the contribution of people associated with the scheme.

What is Janaushadhi?

Generic nomenclature is the chemical name of a drug. Pharmaceutical companies give the medicines a brand name for its dosage form, concentration, and patent such formulations. The companies advertise their brands to make them popular, influence the prescription behavior to increase the sale of their own branded medicine, and once the brand is established, make money out of it by pricing their branded medicines exorbitantly. Compared to the branded version, its generic version is available at a lesser price. The BPSU focuses on marketing generic medicines in Janaushadhi stores by sourcing medicines from pharma CPSUs and the private sector. When the generic medicines are made available in the market, the cost of the same medicines under other brand names also drops substantially to compete.

The predecessor to the Janaushadhi Yojna is the Neethi Medial store. It was started by the Kerala State Cooperatives Federation with the help of their government in 1998. On the success of this, the Central government adopted the Janaushadhi scheme for providing unbranded generic medicines at reasonable prices. Generic medicines are drugs marketed under a non-proprietary name rather than the brand name. The quality, safety, and efficacy of medicines are ensured by the CPSUs.  Around 6000 stores are in the districts of India. Initially, the government has identified 800 essential medicines to be available in the stores, and prescription is not required to buy from such stores. It is a measure to curb the death of people due to the inability to procure medicines. The term Janaushadhi means “medicine for people”.

Benefits under the scheme

The benefit under the scheme is two-fold. With the promotional intent the government has organized the scheme such that apart from the government, any NGO or institution can open Janaushadhi Kendras (Stores). Any NGO, institution, cooperative society identified by the state governments and free space provided in the premises of government hospital or any NGO, society, trust, institution or self-help group having experience of operation in welfare activities for three years and having space and financial capacity, or any pharmacist/ medical practitioner having space and financial capacity. For the Kendras run by government agencies, financial support of Rs.2.50 lakh is given by the Department of Pharmaceuticals, of which 1 lakh exclusively for medicine and the rest for infrastructure. For the individual entrepreneurs, an extended incentive of 15% of monthly sales up to Rs.2.5 lakh in total is provided.

The main aim of the scheme is to bring down the healthcare budget of every citizen of India by providing quality generic medicines at affordable prices. It is made available through effective public-private partnerships. The scheme promoted awareness about cost-effective drugs and perception about them and encourage government doctors to prescribe generic medicines. Lastly, it enabled substantial savings in the case of poor patients who suffer from chronic ailments requiring long periods of drug use. It also promoted & encouraged private industry to sell their quality unbranded generic products through these retail outlets.

As of now, there are more than 1000 therapeutic medicines and 154 surgical and consumables available in the market. The scheme has priced the medicines at a maximum of 50% of the average price of the top three branded medicines. Therefore, the cost of Janaushadhi medicines is cheaper by at least 50-80% of the market price of branded medicines.

The beneficiaries of the yojana

As discussed the following persons will be benefited by the scheme:

  • Poor and middle-class people
  • Those with ailments which require life-long treatment

The following persons setting up stores under the scheme can avail subsidies and other benefits.

  • NGO, Co-operative societies recognized by the state government
  • NGO, trust, society, self-help groups that have space and financial capacity
  • Any individual including an un-employed pharmacist or medical practitioner.

Legal framework of Janaushadhi

Quality aspects of medicines are regulated by the Drugs and Cosmetics Act, 1940 and Rules 1945 and pricing and availability of the drugs is governed by Drug Price Control Order 1995. An expert body called the National Pharmaceutical Pricing Authority (NPPA) also has control over the pricing of medicines. These rules have to be followed by the government and pharma dealers that have undertaken to provide generic medicines. The Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 states that every physician should prescribe drugs with generic names and ensure that there is a rational prescription and use of medicines. The National Pharmaceuticals Pricing Policy, each year is notified with the object of framing regulatory framework for pricing drugs and ensure the availability of required medicines. If these rules and regulations are followed effectively then the goal of reducing the medical expenses by 70% can be achieved.

Critical analysis

  • Progress made under the scheme

Every year, progress is being made to the scheme either small or big. The first major amendment wase earlier, kendras were opened only in government hospitals whereas now it may be opened outside the premises of the hospital also. The product basket included surgical and consumables apart from therapeutic medicines. Private suppliers were included to provide generic medicines. Grant-in-aid is provided to stores run other than government and assistance is also provided to SC/ST and differently-abled persons.

These aids serve as an incentive and attract many people to open Janaushadhi stores. This is the reason for the success of opening around 5000 stores. The scheme serves as a job creator and helps in income generation. The scheme is further focused to provide health care products and services. Possibilities of establishing Janaushadi Kendras in Kisan centers, common service centers, and other retail outlets are being encouraged. Efforts are constantly being taken to improvise the scheme and thereby achieve the mission of reducing per head medical expenses.

  • Similar health care schemes in India

The Indian government has formulated similar schemes for poor people to avail medical services. A lot of schemes are formulated to provide insurance to people on satisfying certain financial and economic conditions. Rashtriya Swathya Bima Yojana is a health insurance program for the Indian poor. The scheme aims to provide insurance to the unrecognized sector workers. This scheme was replaced by the Ayushman Bharat Yojana a scheme to revamp the medical sector. Candidates under this scheme can get free of cost medical assistance in both government and private hospitals.

An amount of Rs.5 lakh per annum per family can be availed under this scheme. Pradhan Mantri Suraksha Bima Yojana is a scheme offering accident insurance. People aged 18 to 70 having a bank account can avail benefits under this scheme. It offers an annual cover of Rs.1 lakh for partial disability and Rs.2 lakhs for total disability or death. Pradhan Mantri National Dialysis Programme as a part of the National Health Mission provides free dialysis to the poor. Patients below the poverty line can avail of these fully free of cost dialysis.

  • Failure of the scheme

The major constrain faced by the Janaushadhi scheme is the misconception among the people that cheap medicines are not original and not effective. Due to the lack of campaign and awareness among the poor people, the scheme did not reach each and every citizen. Secondly, doctors are not prescribing generic medicines. Doctors in collaboration with the pharma industry, prescribe branded medicines so that they can make a profit from those industries.

The misconception among the public that branded medicines are very good to promote the doctors to prescribe them. Medical associations and societies are benefitted by the pharmaceutical companies since they agree to fund the doctors’ scientific research activities. The attractive returns tempt the doctors to prescribe branded medicines.

Researches show that the lack of generic medicines in stores is also a reason for the failure of the scheme. Since only the branded medicines are replaced on expiry and generic medicines are not done, the pharmacists are not ready to stock up generic medicines. The fear of economic loss to be faced by the pharmacist is a corollary to the fact that people do not buy generic medicines. Moreover, a hefty margin of 201-1016% margin can be achieved in branded medicines whereas only 50-55% margin in generic medicines.

Conclusion

Janaushadhi scheme was a major step in encouraging the sale of generic medicines and enabling poor people to procure medicines. Effective implementation will curb the practice of prescribing branded medicines. The quality of the medicines is also good and equal to that of branded ones. Pradhan Mantri Janaushadhi Pariyojana has reached its 50% goal of opening generic medicine stores in all districts and union territories. Over 6000 plus stores are now opened in India as per the report released in 2020.

Apart from selling medicines at low cost, it has increased employment opportunities for a lot of individuals. The credit facilities and other amenities have helped even economically poor people to earn a living. The most benefitted of the scheme are the ones in the unorganized work sector and ones suffering from ailments requiring long term medication.

However, the Janaushadhi scheme is not a great success due to certain factors. A huge misconception that the only costlier medicine is effective among the public stops the consumers from buying generic medicines. There are threats and confusion that medicines that are cheap will not be effective and of not good quality. Doctors are not ready to prescribe generic medicines since they are not benefitted by it. Branded pharmaceutical companies give commissions and other kinds of gifts to doctors who prescribe this.

They indulge in indirect marketing of their medicines. This increases the cost of branded medicines. The government is also not taking steps to promote generic medicines. Awareness is not created among the people about the scheme and stores opened under it. The government needs to take better advertising steps to popularize the scheme which will increase the sale of generic medicines.

Author: Rashmi Senthilkumar from Sastra University, Thanjavur.

Editor: Arya Mittal from Hidayatullah National Law University, Raipur.

Explained: PM Kaushal Vikas yojana (PM-KVY)

Reading time: 8-10 minutes.

Due to the coronavirus outbreak, Prime Minister Kaushal Vikas Yojana (PMKVY), the country’s flagship skill development plan, remains suspended. In the absence of a plan to make a transition from PMKVY 2.0 to PMKVY 3.0, the government has decided to halt any new enrolments. Such a delay in the launch of PMKVY 3.0 has been brought upon due to the coronavirus outbreak. Currently, fighting off the pandemic occupies major government focus and resources.

However, PMKVY 2.0 would continue the training and employment of existing candidates. Ministry of Skill Development and Entrepreneurship has notified an extension in the enrolment in the eight north-eastern States till 31st May 2020. But there is no such direction for the rest of India. This means for the remaining States PMKVY 2.0 ended on 31st March 2020. As per an order dated April 1, the scheme would continue in the Financial Year 2021 till the recommendations of the 15th Finance Commission Report or the Launch of PMKVY 3.0, whichever is earlier.

According to Economic Times, the government maintains that there was no issue and adequate measures are in place. Further, Minister Mahendra Nath Pandey clarified that the government will maintain continuity and quality in skill training.  It would ensure that the candidates and training partners are not affected by the delay due to the lockdown. Meanwhile, the training partners are advised to work with the guidelines of respective States and Union Territories.  They are to follow the Annexure-II User Manuals Due to Blackout Period for Short Term Training and make necessary updates in Skill India Portal.

Salient features of the scheme:

The Scheme aims to provide incentives for the successful accomplishment of a market-driven skill training and certification to around twenty-four lakh trainees in one year. The National Skill Development Corporation (NSDC), Sector Skill Councils (SSCs), Assessing agencies and Training Partners are collectively responsible for the smooth operation of this scheme.

The key features of the scheme are:

  • Short term training: The scheme adopts the short-term training approach. It aims to benefit school/college dropouts and unemployed youth. The training will be given at PMKVY Training Centers (TC). The training will be according to NSQF and will also be for soft skills, entrepreneurship, financial and digital literacy. The duration of training will depend upon the job and can vary anywhere between 150 and 300 hours.
  • Training standards: Training standards are set by the National Skill Qualification Framework (NSQF). The curriculum is decided by SSCs and approved by NSDC.
  • Recognition of prior learning: Trainees with prior skills are recognized and certified under the RPL component of this program. This aims to align the competence of the unregulated workforce with the set standards of NSQF. Bridge courses are also made available. The RPL projects are of three types to be implemented by the requisite agencies.
  • Special projects: These projects are a deviation from the short-term training program. They inculcate training in specific areas. Training in special areas includes that of government bodies, corporates or industry bodies, and training in special job roles.
  • Kaushal and rozgar mela:  The training partners are to organize a Mela once every 6 months to keep the spirit of active participation alive. They are also required to take part in National Career Services Mela and the on-ground activities for incentivizing participation. This maintains the accountability of Training Partners.
  • Placement guidelines: The ultimate object of this scheme is employment. The Training Partners are to provide job opportunities as well as support for entrepreneurship to trainees.
  • Monitoring Guidelines: To ascertain the quality of training, NSDC and other inspecting agencies verify and record the activities of the training centers. They can use various methods including self- audit reporting, call validations, surprise visits, etc.
  • Steering Committee: Such a committee is tasked with the implementation of the scheme. It is also empowered to review the framework and make suitable modifications to maintain the highest possible efficiency.
  • Grievance Redressal System: A robust grievance redressal system is in place. The Online Citizen’s Portal not only broadcasts information about the PMKVY but also acts as a grievance redressal platform.

Why is it introduced?

More than 62% of the working Indian population is in the age group of 15-59 years and around 54% below the age of 25. For such a demographic dividend to be useful, they must be skilled and employable. Only then can they make a significant contribution to economic growth. Thus, this scheme was introduced to train about 24 lakh Indian youth with an estimated cost of Rs. 1,500 Cr. The introduction of the scheme focuses on introducing such skills to the candidates that make them employable. A clear dynamic exists between skill, quality of work and efficiency. The scheme aims to balance the same by encouraging aptitude towards employable skills and thus increase efficiency.

The PMKVY targets the youth at the grass-root level and trains them to boost employability. The scheme would provide India with skilled workers that will help achieve the economic growth targets. About Rs. 1500 crore have been approved by the cabinet to yield the most out of the scheme. The farsightedness of the scheme aligns with the demand from the Central Government’s flagship programs, such as ‘Swachh Bharat’, ‘Make in India’, ‘Digital India’, ‘National Solar Mission’ and so on.

Who can benefit from it?

This Scheme applies to any person of Indian Nationality who has either dropped out of school or college or is unemployed. The candidate must have a valid Aadhaar card and an alternate ID such as a PAN Card or Voter ID. He should also have a bank account for direct transfer of the payouts. The PMKVY aims at reducing unemployment as well as aims at utilizing the youth force of India. This scheme will ensure that the candidates enrolled with it become certified with skills and are employable in the market.

Critical analysis

The Sharada Prasad Committee, in its report released in April 2017, observed that the targets set by the PMKVY were too ambitious. It also pointed out that the funds allocated were not being adequately monitored. Despite its targets, only 1.8% of youth gained training under this scheme. Only 16% of trainees were funded by the government. Many had to bear the cost of training themselves.

The focus of the policy is centric to short-term skill courses. And even then it resulted in low placements. The aim was to impart training in a short period but the training period for most of the trainees was 1 year. For 30% of the candidates, it took more than 2 years.

Skill development focuses on the Public-Private Partnership Model and thus it needs a lot of effort from both the players. Most private companies have training centers. The government with the PMKVY also presented an ambitious approach. Despite these efforts, there is a huge gap between the skills needed by the industry and the skills imparted through various training institutes. Even the introduction of PMKVY could not bring a significant change in the employability of youth as was claimed. This initiative suffered from severe lacuna in its implementation.

Conclusion

Any policy is inadequate without an appropriate implementation. Similarly, PMKVY needs to have clear, transparent and responsible implementation. Accountability should be attached to the Training Partners for the number of placement opportunities. The government needs to ensure high-quality education at school levels to prepare the youth for a better future. It should also promote vocational education in schools.

Thus, participation from more and more industries should be sought to increase the chances of employability under the scheme. Around one million youth enter the workforce every month. It is necessary to impart training to as many candidates as possible. But it should not strain the quality of training provided.

Author: Anmol Mathur from Symbiosis Law School, NOIDA.

Editor: Shalu Bhati  from Campus Law Centre, Faculty of Law, University of Delhi.

Explained: Disaster Management Act (DM Act)

Reading time: 8-10 minutes.

Life on Earth is at the ever-increasing risk of being wiped out by a disaster, such as sudden global nuclear war, a genetically engineered virus or other dangers we have not yet thought of.

                                                                                                                     ~ Stephen Hawking

The people of India are going through a complete lockdown for 21 days started on 24th March 2020, in bid to stop the spread of coronavirus, that has claimed over 11,00,000 lives across the world so far and has been declared a global pandemic in nature by the World Health Organization (WHO). This lockdown has brought everything to halt in India except the essential services.

The coronavirus disease (COVID-19) is an infectious disease caused primarily through droplets of saliva or discharge from the nose and no vaccination has been invented yet and thus, the most effective solution to control the spread is social distancing, as it is communicable and the symptoms may take around two weeks before they are clearly visible. Given the large demography of India, it was only wise to put a lockdown in the early stage of the pandemic.

The Union Home Ministry said that in an order under the Disaster Management Act, 2005 to declare 21 days countrywide lockdown to prevent the transmission of COVID-19 pandemic. Directions are issued that district and state orders should be effectively sealed. The states are directed to ensure there is no movement of people across cities or on highways. Only the movement of goods should be allowed and that, district magistrates and police superintendents would be personally responsible for the implementation of these directions.

Also, all offices of the Government of India and State Governments, and their autonomous bodies and corporations shall remain closed, except those dealing in defense, treasury, public utilities (including petroleum, CNG, LPG), disaster management, power generation, post office, national informatics center, water, sanitation, police, home guards, prisons, etc. Hospitals, medical establishments, clinics, dispensaries, laborites, and allied services will also remain functional.

There is no country that is totally impervious from any catastrophe. However, the magnitude of such catastrophes may vary. Therefore, various nations take measures to prevent a disaster and also to recuperate if such a disaster occurs. Disaster management can be referred to as the planning, organizing, and management of the resources in order to curb the calamity and lessen the impact of the disaster by responsibly acting on it.

Therefore, the need for management of disaster was realized by the State and The Disaster Management Act was enacted by the Parliament in the Fifty-sixth Year of the Republic of India on 26th December 2005. It was enacted as the central Act to deal with disaster management. Principally it provides for the effective management of disasters and for matters connected therewith or incidents thereto. This act foresees three categories of Disaster Management structure in India at National, States and District levels.

Significance of this development

As this disease is a contagious disease the major steps to be taken to curb the effect of it is to stop the infection and for that, it is advised by the WHO that ‘social distancing’ shall be maintained which will, in turn, lead to decrease the spread through sneezing or coughing. Social distancing here means that two persons must maintain a distance of at least 3 meters between them so that the infection does not spread.

In lieu of the guidelines of the World Health Organisation, the Government of India has imposed a nationwide lockdown and it also passed an order to seal the state and district borders to stop the exodus of migrant workers. This was an important step as the coronavirus has been deemed to be a pandemic and the cases in the country crossed the 5000 mark.

These steps were taken by the Central Government in conformation to the provisions of the Disaster Management Act, 2005. Section 35 of the Act states that the Central Government shall take all such measures as it deems necessary for the purpose of disaster management. It also states that the Centre must ensure that the state governments are also working towards the same goal.

Salient features of the DM Act

The Disaster Management Act was enacted in India on 26th December 2005 by an act of Parliament. The Act was enacted to provide for the potent management of disasters or matters connected therewith or incidental thereto.

The following are the features of the Disaster Management Act, 2005:-

  • Disaster Management Act, 2005 comprises 79 sections and 11 chapters.
  • The Act covers all aspects of disaster management i.e., planning, avoidance, mitigation, response, and resurgence.
  • This Act was the first statute that defined the term ‘disaster’ and ‘disaster management’ in its whole sense under Section 2(d) and Section 2(e) respectively.
  • It provides an institutional structure for monitoring and implementation of policy for which the National Disaster Management Authority (NDMA) and the State Disaster Management Authority (SDMA) was established.
  • All the roles and responsibilities at all levels of government, starting from the Central Government right up to Panchayat and Urban Local body level is the matrix format.
  • The Act follows the regional approach; therefore, it will be beneficial not only for disaster management but also for developmental planning.
  • NDMA and SDMA perform their function to prepare for the disaster and lessen the menace at their respective levels.
  • District Disaster Management Authority is also established under this Act to work effectively at the district level.
  • As per the provisions of this Act, financial mechanisms like Disaster Response Fund and Disaster Mitigation Fund shall be created at the national, state and district level to reduce the severity of the loss incurred due to the catastrophe.
  • The developer of this Act also emphasized preparing communities to cope with disasters, so it also stresses on a greater need for information, education and communication activities.
  • It also focuses on vital affairs such as early warning, information dissemination, medical care, fuel, transportation, research and rescue, evacuation, etc. to examine, whether the agencies are active.
  • The provisions of this Act also prescribe the penalties to be imposed on any person in case of an offense (as provided in the statute) being committed by him.

The abovementioned features of the Act make it an exemplary statute that helps in the prevention of the disaster by readily preparing for it beforehand and also in successfully recovering from a disaster. The Act ensures that necessary steps are taken by various factions of the government for the prevention and reduction of disasters.

Its relevance W.R.T. COVID-19

On 24th March 2020, The Ministry of Home Affairs invoked Section 6(2)(i) of the Disaster Management Act and directed the ministries or departments of the Government of India, state and union territory governments and authorities to implement the measures laid down in the central order. Section 10 of NDMA authorizes the central authority to issue guidelines and directions to several state government with respect to addressing disasters.

Section 10(2)(1) of the Act allows the National Executive Committee to give directions to governments regarding measures to be taken by them. The Union home secretary, who is the chairman of the National Executive Committee, delegated power to the Union health secretary in this regard.

The offenses and penalties are provided in Section 51 to Section 60 of the Act.

Under the provisions of this Act, any person who refuses to comply with the directions of the Central Government shall be liable to imprisonment for a term which may extend to one year or with fine, or with both, according to Section 51 of the Act.

According to Section 53 of the Act, whoever misappropriates or appropriates for his own use the money or materials provided for disaster relief, shall be punishable with imprisonment which may extend to a term of two years or with fine, or with both.

According to Section 54 of the Act, any person who makes or circulates a false alarm or warning as to disaster or its severity or magnitude, leading to a panic shall be punishable with imprisonment for a term which may extend to one year or fine, or with both.

Earlier in March, the ‘misgiving’ of information on ‘chicken as a carrier of Coronavirus’ on social media, cost the poultry industry an estimated loss of Rs 1.6 billion per day, according to the reports of the All India Poultry Breeders’ Association. Despite the clarification by the Indian Council of Medical Research (ICMR), not only did the culling of chicken continue but also played havoc in the lives of chicken breeders, traders and allied sectors.

Recently a PIL was been filed by Home Secretary Ajay Bhalla IAS in a similar regard that deliberate fake news can cause panic in the society. Therefore, the Centre said that the creation of panic is an offense under the Act and an ‘appropriate direction from the top court would “protect the country from any potential and inevitable consequence resulting from a false alarm having the potential of creating panic in a section of the society’.

The central government has sought a direction from the Supreme Court that no media outlet should print, publish or telecast anything on COVID -19 without first ascertaining facts from the mechanism provided by the government. But if a person or channel does so then they’ll be charged under Section 67 of the Disaster Management Act, 2005 which states the direction to media for communication of warnings, etc.

These are the major provisions of the Act which came into effect after the lockdown was imposed in the country. Many other provisions were also in effect which were deemed to be necessary for the containment of the corona virus disease.

Conclusion

The Disaster Management Act, 2005 has thus played an important role in a fight with the highly contagious novel COVID-19 or commonly known as coronavirus. It was passed to enable the central government to provide a legal framework for setting up a National Disaster Management Authority under the chairmanship of the Prime Minister of India.

While the tactic of the Act does not specifically allocate the control of a pandemic like COVID-19, the powers of the NDMA under Section 6 of the Act can broadly be expounded to give a unified command to the central government to effectively manage a disaster throughout India by making it mandatory for the government to take all such necessary measures which will help curb the disease.

Under the DMA, 2005, the COVID-19 outbreak is needed to be listed as a disaster, allowing broad powers of the central government to deal with the pandemic by setting policies, strategies and guidelines for disaster management to ensure timely and efficient response. Section 38 of the DMA imposes on the states the obligation to obey NDMA’s directions.

To conclude, whenever there is a catastrophe, mishap, calamity or grave occurrence in any area, an emergent measure such as Disaster Management Act in the current situation, needs to be taken for the interest of a larger public even at the cost of some inconvenience.

Authors: Dhanesh Desai from Amity Law School, Noida and Pragya Narang from The Northcap University,Gurugram.

Editor: Arya Mittal from Hidayatullah National Law University, Raipur.

Insurance scheme for health workers

Reading time: 8-10 minutes.

The COVID-19 outbreak in India started towards the end of January posing serious health risks. Hospitals and health workers have been playing a huge role in treating patients. They are facing a new challenge as there is no fixed medical protocol to treat patients affected by this virus. The outbreak has led to an increased demand for health care workers and has put them on the front line of managing and treating patients. This has also called for maintaining the quality as well as the quantity of the available health care workers. The countrywide lockdown has further aggravated the situation for the health sector. The government has, thus, taken various steps to protect the health care workers from possible exposure to the virus and also to help their families.

Pradhan Mantri Garib Kalyan package: Insurance scheme for health workers fighting COVID-19

The Union Ministry of Finance launched a nation-wide insurance scheme allocating 1.7 lakh crore rupees to help the poor and the vulnerable fight the pandemic. This included various schemes to help the needy in this time of distress. To support the health care workers who have taken the lead and are treating the patients affected by COVID-19, the government has also introduced an insurance scheme specifically for them. This scheme was introduced as the health care workers are exposed to huge risks of health and life while treating the patients. The lesser availability of personal protection equipment has led to this risk.

Details and significance of this scheme 

Insurance cover:

This is an accident insurance scheme that covers the loss of life due to COVID-19 as well as accidental death caused due to COVID-19 related duties. It will provide the health care workers with coverage of 50 lakhs for the next ninety days and is applicable from 30th March 2020 till 30th June 2020. This will be extended in case the pandemic is not controlled.

Who is covered:

The scheme has considered all those health care providers who will be in direct touch with assisting and treating the patients. According to the notification released by the ministry, “Safai karamcharis, ward-boys, nurses, ASHA workers, paramedics, technicians, doctors and specialists, and other health workers” are covered under this scheme.

This scheme covers not only the health care providers working in government hospitals but also those working in private hospitals. The notification specifies that 22 lakh health care providers will be covered under this scheme. The scheme also covers daily wage workers working in the hospitals; outsourced staff of the government hospitals and workers hired through other contracts.

Process of claiming:

The process of claiming insurance has also been simplified. A family member of the deceased, the claimant, is required to fill up certain forms for making such a claim and also submit the necessary documents to the institution in which the deceased was working. The institution will then forward the same to the competent establishments such as the Director-General of Health Services as authorized by the State Government or the Central Government. This will then be sent to the insurance companies for approval of the claim.

Significance:

The significance of this scheme can be explained based on the fact that health service providers have taken an immense risk in treating patients affected by this virus. Though it is similar to SARS, it was newly discovered in Wuhan, China in December 2019. As no existing protocol was present, the healthcare providers had to treat the patients in the way they thought to be the best. Worldwide, healthcare providers have developed symptoms and have contracted the virus while performing their duties.

Data shows that a significant percentage of the working health care providers in Italy have contracted the virus from the infected and few of them have died. Apart from this, the health care providers are short of the personal protective equipment, which puts them at higher risk levels.

In a hospital in Bihar, a patient was treated by doctors and nurses without personal protective equipment. Almost all of them started showing symptoms. So far, fifty doctors and nurses in India have tested positive for Coronavirus. After nearly thirty health care providers were tested positive in a Mumbai hospital, it was declared to be a containment zone.

Apart from doctors and nurses, daily wage workers and ward-boys are also exposed to the virus daily owing to the nature of their work. In a few hospitals, the health care providers have gone on strikes and some have even rendered their resignations due to the unavailability of basic protective equipment to treat the patients. Apart from the personal protective equipment, factors such as the increased exposure to the infected patient and a lack of training to treat respiratory disorders have also contributed.

Healthcare providers across the world have been exposed to such risks. The need to protect the health care providers has hence increased even more in this current situation. With many healthcare providers in India having gone into isolation, and many of them protesting, this scheme, which provides 50 lakhs to the legal heir of the deceased health service provider, is seen as a good move by many medical associations in the country. The Government has allotted the budget of the National Disaster Response force for managing the costs involved in the above scheme.

Salient features

Unlike a usual health insurance cover, this scheme provides for insurance coverage only after death. This scheme does not cover the expenses incurred in case the health care provider is admitted to a hospital after being tested positive for corona. This insurance scheme is in addition to the coverage taken by the person in his/her capacity.

The Government has also stated that the Central Government and the concerned State Governments will be required to give certificates to the health service providers based on which the insurance can be claimed. The New India Assurance Company has come forward and released the guidelines for the same. The company has also stated that the amount will be paid almost immediately. The positive test certificate is only necessary in cases of death due to COVID-19. Accidental death caused due to treating patients affected with COVID-19 does not require the test certificate.

The Government has, thus, tried to introduce a scheme for the safety and security of health care workers at risk and has also has tried to make the claiming process as hassle-free as possible.

Shortcomings

The biggest shortcoming of the scheme is that the insurance coverage is only provided in case of death that includes death caused due to COVID-19 and accidental deaths caused due to COVID-19 related duties.

It is known that not everyone who contracts the virus dies. The shortcoming lies in the fact that the expense incurred by the family for treatment will be very high. The Supreme Court has time and again slammed the private hospitals for charging an excessive amount for treatments. Though there are other insurance schemes available such as the Ayushman Bharat, all the health workers are not necessarily covered under this scheme. For instance, in the Ayushman Bharat scheme, eligibility is decided on the basis of the income levels. All the health workers may not fall under the requisite income bracket and might not be able to afford the expense for treatment otherwise.

Though this scheme has tried to include under its ambit a huge population, it is expected that many will be ignored under the category of contract workers as they may not have been categorized, under those contracts, as “health workers”.

The Government, recently, has also released FAQs on the Pradhan Mantri Garib Kalyan Package for health workers that aim to clear the common doubts including the coverage of the scheme. Since its release, after having read the fine print, the concerns against the scheme are being raised.

Legal provisions

Health has been perceived as a public concern in modern times. Though the health of a person is restricted to his/her personal boundaries, a situation like the present pandemic calls for measures to be taken by the Government.

The right to health is not an express right under Article 21 of the Constitution of India. But many judgments have pointed out that the right to health is an implied right under Article 21. No clear boundaries have been laid so far as to determine what falls under the ambit of this right. The courts have time and again dealt with cases that involve reimbursement following the insurance schemes provided by the Government. In State of Punjab v Mohinder Singh Chawala [(1997) 2 SCC 83], the court held that the Constitution places an obligation on the State to provide reimbursement to the patient following the scheme provided by it.

Apart from Article 21, the Directive Principles of State Policy under Article 47 imposes the obligation on the State to improve public health. Article 41 of the Constitution deals with social security schemes.

Various insurance schemes in India introduced by both the Central Government and the State Government fall under the social security blanket. The PM Garib Kalyan insurance scheme is unfunded. The Government will be paying the premium through the budget of a specific department, namely the Ministry of Health and Family Welfare. This scheme has other facets of social security as well for which a fund is created for it specifically.

Article 39(e) also places certain obligations on the state on a similar line. It provides that the State shall protect “the health and strength of workers, men, and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength”. Though the directive principles of State policy cannot be enforced in a court of law like a fundamental right can, they act as a guiding principle for the State.

This scheme does not have a specific legislation drawn out for this purpose and functions solely as an insurance scheme introduced by the Government. In countries like Canada and the United States, they have a statutory framework that acts as a legal backing to all kinds of insurance programs introduced by their respective governments. These frameworks also draw guidelines, and limits as to what is covered under every insurance scheme. Though no such statutory framework has been drawn for the Pradhan Mantri Garib Kalyan Yojana, a person eligible to claim the insurance can enforce his/her right under Article 21 in the court of law through various writs. 

The Central Government is empowered under Article 245 and Article 246 to make such laws. The Parliament can pass a law to back the Pradhan Mantri Garib Kalyan Yojana under Entry 47 of List I. Entry 47 of List I deals with Insurance i.e. the Parliament has powers to pass a law for providing insurance. 

Though the scheme is limited only to the next ninety days (from 30th March 2020), enacting a law for its purpose will result in the proper application of the scheme. Introducing a law for the same gives a “legal guarantee” for the beneficiaries to enforce their rights in a court of law.

Conclusion

The scheme will cover about 22.12 lakh people. All of these are suspected to be at risk due to direct contact with the infected patients. This scheme was a result of numerous letters written by medical associations to take actions for the safety, and security of the health service providers. This move by the Government was invited by many medical associations as this gave security to the families of medical service providers.

The scheme also provides for immediate claiming of the coverage. But some of the medical associations are not very happy with the way the scheme has been designed. The insurance amount will be provided in cases of accidental death caused due to Coronavirus. An inclusion of hospitalization expenses caused due to the COVID-19 would have been a good motivation for the health service providers.

Most of the states in the country are in the second stage of the pandemic. There is already a shortage of nearly 2 million nurses and around six lakh doctors. Apart from this, there is also a demand for ward boys, paramedics, daily workers, etc. who lend a helping hand to the health care professionals. When India enters the third stage, the demand will increase. In such a situation, it is important to protect the health service providers form exposure to the virus.

The present scheme provides some relief but it is also important to provide non-monetary benefits to encourage health service providers in India. Long working hours and non-availability of personal protective equipment is a huge factor that discourages doctors from attending patients with symptoms. In these trying times, much more efforts are needed to save those who are working towards saving us.

Author: Harinie.S from Symbiosis Law School Hyderabad.

Editor: Shalu Bhati  from Campus Law Centre, Faculty of Law, University of Delhi.

Explained: FRBM Act

Reading time: 8-10 minutes.

There exists a nationwide consensus on the fact that a developing country such as ours needs to maintain its financial deficits in order to sustain the flow of disposable income in the hands of its citizens. In furtherance of the same, the Government of India (GoI) had promulgated the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 to ameliorate the sinking economy of the country, owing to the increasing revenue and fiscal deficits during the late-1980s.

Likewise, even the State governments had enacted the FRBM Act within the framework of their respective legislations, with Karnataka pioneering the promulgation of the Act. Striving to hold the Government accountable for its reckless borrowings, the FRBM Act set an upper threshold of 3% (of the GDP/GSDP) on fiscal deficit and had also placed a ceiling on the Government’s debt and interest payment ratio.

In an attempt to efficiently finance its emergency relief package catered towards treating COVID-19 patients, the State of Kerala had recently proposed to borrow a sum of INR 12,500 crores from the Centre in April 2020. The same insinuates towards the possibility of the State being mandated to follow some strict limitations vis-à-vis its borrowing and/or spending capacities for the rest of the financial year, so as to maintain its fiscal deficit at 3% (of the GSDP), as per the FRBM regulations.

However, an analysis of Kerala’s current financial position has revealed that the State has the bargaining power to borrow a sum of about INR 25,000 crores during the current financial year of 2020-21. Accordingly, the State has asked for a relaxation of the circumscribing regulations pertaining to the maintenance of the fiscal deficit of the FRBM Act. While the overarching public policy concerns associated with the proposal may induce us into adjudging Kerala’s plea as warranted in law, it is only fair for us to meticulously analyse all the factors which are at play in the aforementioned issue.

Analysing Kerala’s proposal: The curious case of FRBM flexibilities

Clearly, the State of Kerala’s demand for relaxation of the FRBM regulations is not the first instance when a State has specifically asked for such flexibilities. Most of these flexibilities are worked through Section 4(2) of the Act, which is commonly referred to as the ‘escape clause’. This clause entitles the Centre with the discretion to exceed the yearly fiscal deficit target when there exists an impending quagmire related to factors related to the security of the nation, war, structural reform(s), calamities, epidemics et al.

Recently, the constant decrements in the corporate tax slabs was identified as an aberration within the structural reform of the Centre, which was considered grave enough to trigger the escape clause. Consequently, the Centre had modified the fiscal deficit cap for the fiscal year 2019-20 at 3.8% (a 0.5% increment over the previous ceiling). Economists have also argued this increment in the previous year necessitates a corresponding relaxation of the cap for 2020-21, (from 3% to 3.5%) to compensate for the spill-over impact of the reforms undertaken in the previous year.

Additionally, during the time of the global financial crisis, the fiscal deficit target saw a deviation of about 3.4% since the Centre was expected to do away with collecting taxes and focus on increasing its expenditure on creating new jobs and funding public projects. All of this was targeted towards countering the ill-effects of the global slowdown of growth which was incumbent owing to the financial crisis of 2008-09. Accordingly, the fiscal deficit thresholds set for various States were also relaxed during that financial year to 3.5% of the GSDP and such relaxations extended to the subsequent fiscal year as well.

With respect to countries’ proclivity towards amending their fiscal deficits during a particular fiscal year, American economist Alan J. Auerbach had presented a paper on fiscal policy in the Conference on “Rethinking Macroeconomics” at the Pearson Institute, in 2017. The paper highlighted that several countries had to recalibrate their fiscal deficit targets when their attempt to adhere to the same exhibited possibilities of a greater damage being caused to the economy. To this extent, even the Indian Finance Bill presented in 2018 had stipulated a few clauses (207-10) which were centred towards amending certain provisions of the FRBM Act. One such clause sought to eradicate the reference to the term ‘revenue balance’ while another focused on doing away with the practice of employing fiscal deficit as an operational parameter, altogether.

Clearly, the State of Kerala had been one of the first states to offer a sum of INR 20,000 crores towards allaying the rigours associated with the outbreak of the COVID-19 on the livelihoods as well as overall growth of the nation. A proposal by which the State now aims to borrow a sum of INR 12,500 crores when it already is in the fiscal position to borrow about INR 25,000 crores during this financial year seems to be a reasonable proposal, which may be approved to trigger Section 4(2) of the FRBM Act.

Objectives of the FRBM Act

Economists such as S. Mazumdar have argued that the objective of the FRBM Act revolved around assuring “inter-generational equity” in fiscal management along with ensuring the presence of macroeconomic stability in the long run. Owing to the losses accruing to the Indian economy due to reckless borrowing by both the Centre and the States, the FRBM Act was enacted to engender some level of accountability and transparency between the Government’s fiscal reforms and its public policies. Accordingly, the FRBM rules so promulgated were announced by the Government in 2004. These rules were stipulated to not only manage the fiscal reforms and policy in India but also to achieve sustained economic growth with social justice.

In addition, the FRBM Act was promulgated to strike a balance between the competing interests associated with public borrowings and taxations. For, in India, the fiscal deficit has been primarily financed through public borrowings which had a corresponding threat of increasing the taxation for the masses in the future. Economists have also conducted several studies wherein they have tried to examine the relationship between Government revenue and Government expenditure. The relationship between the two is often premised on the fact that revenue has a direct impact on the expenditure of the Government. In other words, it is neither desirable to have a high revenue deficit nor a high fiscal deficit to finance expenditure.

Thereby, the broad objective of the FRBM Act is to keep a check on the expenditure incurred by both the State as well as the Central Government in carrying out its policy reform during a fiscal year. Some economists also consider that the Act provides an institutional framework of fiscal consolidation within the Indian regime. For, with the promulgation of the Act, it has become imperative for the federal and the state legislatures to undertake steps towards curbing fiscal deficit, diminishing revenue deficit as well as engendering even greater revenue surplus in the coming years.

Some salient features of the FRBM Act

The FRBM Act has been enacted to ensure a greater transparency within the government machineries as they implement the policy reforms for a particular fiscal year. The Act has 13 Sections and some of them revolve around the Centre’s duty to project certain number of fiscal indicators in its policy statement. In other words, it is imperative for the Centre under the FRBM Act to display four of the fiscal indicators in the medium-term fiscal policy statement. These indicators include revenue deficit (as per % of GDP), fiscal deficit (as per % of GDP), tax revenue (as per % of GDP) as well as the cumulative outstanding liabilities (as per % of GDP). Along with this, the Act clearly sets a limit on the fiscal and revenue deficit for a specific fiscal year, under Section 4 of the Act. It has also been stated that any deviation from the pre-specified fiscal deficit target is not bound to exceed 0.5% of the GDP of that year. 

Furthermore, Section 3 of the FRBM Act deals with the fiscal policy statements which are laid every year before both the Houses of Parliament, along with the yearly financial statement. While handling down these statements, the Act mandates the Centre to also put forward the Fiscal Policy strategy statement, the Medium-term Fiscal policy statement, the Medium-term Expenditure Framework statement and the Macro-economic Framework statement. The Fiscal Policy Strategy statement is the broadest and the most exhaustive of all and is expected to include the strategic priorities of the Central Government, their fiscal policies, their primary fiscal measures along with an account of their current policies in accordance with the principles enlisted in Section 4 of the Act. The Macro-economic Framework statement, as defined in Section 3(5) is expected to contain a detailed assessment of the possibilities of economic growth prospects in the specific fiscal year.

Conclusion

The enactment of the FRBM Act inarguably reflected the legislature’s commitment towards fiscal conservatism. It is apparent that most countries depend on eternal financial assistance to meet their developmental expenses. However, one cannot deny the fact that some of these expenses are unproductive and thereby, fail to generate the required income for the economy.  In light of the points discussed above, an inclination towards accepting the State of Kerala’s proposal for relaxation of the fiscal deficit for this financial year is likely to be discerned.

Clearly, the ongoing pandemic created by the sudden outbreak of COVID-19 is grave enough to be qualified as a national calamity, which also makes it appropriate for triggering the applicability of the escape clause under the FRBM Act. A relaxation of the FRBM regulations is expected to facilitate both the Union as well as the State Government to gradually increase the overall expenditure to tackle the COVID-19 pandemic.

Author: Prateek Joinwal from West Bengal National University of Juridical Sciences, Kolkata.

Editor: Sweksha from Law Centre-II, Faculty of Law, University of Delhi.

Election to Rajya Sabha

Reading time: 6-8 minutes.

Recently, the Election Commission was going to conduct elections for 55 Rajya Sabha seats, on 26th of March, 2020, which were going to get vacant on or before the 12th of April, 2020. A total of 37 members have been elected unopposed and elections were to be conducted for 18 seats. But with the unpredicted Coronavirus outbreak and complete lockdown in the country, these elections had to be called off by the Election Commission until further notice.

The 18 seats included 4 seats from Gujarat, 3 from Rajasthan, 3 from Madhya Pradesh, 4 from Andhra Pradesh, 2 from Jharkhand, and 1 each from Manipur and Meghalaya. The Elections from Gujarat and Madhya Pradesh infused suspicion after the defection of leaders from Congress to BJP recently.

The functioning of the Rajya Sabha

The Rajya Sabha is the Upper House of the bicameral Parliament of India. It has a maximum strength of 250 members, out of which, 245 are currently elected. The Vice-President of India is the ex-officio chairman of the Rajya Sabha, and a Vice-chairman is elected within the house itself. The Rajya Sabha is a permanent house and does not dissolve. A member of the Rajya Sabha has a tenure of 6 years and is elected indirectly. The Upper House has equal powers as that of the Lower House, except for the matters of Money bills.

Rajya Sabha election process

Rajya Sabha has a maximum strength of 250 members, out of which 245 are currently sanctioned. The sanctioned seats have 233 elected members (225 from States and 8 from Union Territories), and 12 nominated members, which are nominated by the President of India.

The Rajya Sabha, unlike the Lok Sabha, does not dissolve and holds elections for its one-third members every 2 years. The Rajya Sabha elections are not conducted directly as that of Lok Sabha, rather these elections are indirect. The process that is followed is the Single Transferable Vote (STV) system. The elected Members of Legislative Assemblies (MLAs) of all the States vote to elect the members of Rajya Sabha.

The MLAs are given a list of candidates in which they have to give a number to the candidates in order of their preferences. Those who receive at least 10 votes as first preference are elected. This system is adopted to ensure that the Rajya Sabha does not have a majority of those candidates who are from the ruling party.

There are two types of Elections to Rajya Sabha:

  1. Electoral College: This method is used for the indirect elections of the candidate by the representatives of the State Legislative Assemblies or the Electoral College of the Union Territory, as the case may be. Single Transferable Vote system is used for these elections.
  2. Bye-Election: The tenure of a member of Rajya Sabha is 6 years. But if a member retires before the completion of his tenure, his position is filled up by the method of Bye-Elections.

Elections for Rajya Sabha are conducted indirectly deliberately by the Election Commission. If these elections would have been conducted directly, like Lok Sabha Elections, the majority of seats would have been taken away by the ruling party only. If that would have happened, the government would have enormous power, and it would be very difficult to oppose any policy. This would also have failed the principles of democracy. Hence, to ensure equality and justice, the Rajya Sabha Elections are conducted indirectly.

Eligibility criteria: Voters and candidates

Voters:

The Voters in the Elections to Rajya Sabha are the Members of Legislative Assemblies of States. To become an MLA, a person:

  1. Must be a citizen of India.
  2. Must be of 25 years of age in the case of Legislative Assembly and 30 years of age in the case of Legislative Council. Must be a voter of the State he is contesting elections for.

Candidates:

The Candidates in the Elections to Rajya Sabha must:

  1. Be a citizen of India.
  2. Make and subscribe before some person authorized in that behalf by the Election Commission an oath or affirmation according to the following form set out for the purpose in the Third Schedule to the Constitution.
  3. Be of not less than 30 years of age.
  4. Not be a proclaimed criminal.
  5. Not be of unsound mind.
  6. Not hold any other office of profit under the Government of India.
  7. Not be insolvent.

Constitutional provisions which regulate the Rajya Sabha

The following provisions of the Constitution of India regulate the Rajya Sabha:

  1. Article 80 – Article 80 of the Constitution of India ascertains the maximum strength of the Rajya Sabha to be 250, out of which 238 can be elected from States and Union Territories, and 12 are to be nominated by the President of India. Out of these 250 seats, 245 seats are currently allocated and 5 seats are vacant.
  2. Article 84 – Article 84 of the Constitution of India lays down the qualifications required to be a member of the Rajya Sabha. These qualifications are as follows:
  3. Candidate must be a citizen of India.
  4. Candidate should be of 30 years of age.
  5. He should fulfill any other qualifications required under any Law made by the Government of India.
  6. Article 102 – Article 102 of the Constitution lays down that a person shall be disqualified for being chosen as, and for being, a member of either House of Parliament. These grounds for disqualifications are as follows:
  7. Candidate ceases to be a citizen of India.
  8. He holds any office of profit under the Government of India.
  9. He is of an unsound mind.
  10. He is insolvent.
  11. He is disqualified under any Law made by the Parliament.

Conclusion

Rajya Sabha elections are different from that of the Lok Sabha Elections to ensure that the principles of democracy are not defeated. These Elections happen once every two years and one-third of the strength changes. These special elections are conducted through the system of Single Transferrable Vote (STV).

The Upper House has equal powers as that of the Lower House, the only exception being Money Bills. This house is permanent, and cannot be dissolved by the President. The Constitution has provided provisions under which a person may be qualified or disqualified from being a candidate of the house.

Author: Naman Keswani from Hidayatullah National Law University, Raipur.

Editor: Tamanna Gupta from RGNUL, Patiala.

Law regarding political horse-trading in India

Reading time: 6-8 minutes.

After 15 months of ruling from its election in 2018, the Congress government headed by Kamal Nath in Madhya Pradesh collapsed as 22 sitting MLAs of the Congress resigned in support of Jyotiraditya Scindia who left the party earlier this month.

The question is what is the reason behind such mass resignations which decides the fate of elections bypassing people’s mandate? One can find the answers in ill practices that are adopted by various political parties in India. The opposite party tries to lure the legislators to act in a particular manner and do ‘bulk purchase’ of MLAs which results in Horse-trading.

What is ‘horse-trading’?

The expression “Aya Ram Gaya Ram” clearly points towards the situation of political Horse-trading in India. The term Horse-trading finds its roots back to 1967 when floor crossing and political horse-trading was at its zenith.  Horse-trading means when a political party tries to usher in members from the opposition party to realize the majority in the assembly and resort to unapproved techniques in doing so. The said party may offer financial benefits ministerial perks to lure opposing members.

It can be done in many ways such as either by wooing away as many legislators of any particular party as possible or by persuading the members to resign so that seats fall vacant. The benefit of this kind of practice is that such vacant seats aren’t counted for deciding relative strengths of parties and thus in this way, the balance can tilt in favor of another party.  

Though the acceptance of money by a legislator for doing any act on the floor of the house is not unconstitutional it is deemed to be highly unethical. The Cash for Query incident of 2005 reminds one of the influence of money and the extent to which legislators go to satiate their avarice.

Prevalence in India

The concept of Horse-trading in India started in 1967 when a legislator changed his party so frequently that folks called him Aya Ram Gaya Ram. He was a legislator of then Haryana Legislative Assembly who was elected on Congress ticket. He changed party thrice in a fortnight from Congress to Janata Party, back to Congress and then within nine hours to Janata Party again.

Since then, it has been observed numerous times in various state assemblies as well in Parliament. Some famous incidents are as follows: The coalition government of P V Narasimha Rao in 1993 was faced with a trust vote. The government managed to survive, with the backing from members of the Jharkhand Mukti Morcha (JMM) and the parting of Janata Dal (Ajit). The latter’s leader Ajit Singh himself withheld his vote. It was alleged that horse-trading had taken place to leverage the vote.

In 2019, the Congress government collapsed in Karnataka as at least 17 MLAs of the ruling party tendered their resignation and thus HD Kumaraswamy-led government found itself in the state of quandary and Yediyurappa of BJP party was crowned as the Chief Minister of the state. Such practice in Karnataka found a loophole in existing law where if any legislator resigns he can be re-elected as it is not covered under the purview of Anti-Defection Law.

The same technique of persuading MLAs for the resignation has been used in Madhya Pradesh recently.

Laws in India

The most important law to prevent horse-trading and widespread defection is Anti-Defection Law which is given under the 10th schedule of the Indian Constitution. It was inserted by 52nd Amendment in 1985 as a series of defections that happened after 1967 due to the increasing trend of forming coalition government which was formed of heterogeneous elements having very little or no ideological similarity. The schedule is connected to Article 102 and Article 191 of the Constitution which pertain to disqualification. This law aims to prevent defections and to ensure that legislators don’t switch parties for any personal benefits and also that they don’t violate the mandate of the respective party. Thus, it ensures party discipline.

This act prescribes the process by which legislators may be disqualified on grounds of defection by the Presiding Officer of a legislature. A legislator is deemed to have defected if he either voluntarily gives up the membership of his party or disobeys the directives of the party leadership on a vote. However, if at least two-thirds of the legislators leave the party to join another, they are not considered to have defected. The decision regarding disqualification lies with the Chairman or the Speaker of the House.

The law holds relevance because when a voter cast his vote for a candidate, he not only considers the candidate but also the party and the manifesto for which the candidate stands for. Hence, when the defection takes place it is the electorate that’s disappointed, making a mockery of democracy.

Landmark judgments

Earlier, the choice of the chair wasn’t subjected to the review by the courts. However, the Supreme Court in 1993, in Kihoto Hollohan V. Zachilhu held that this provision is unconstitutional as it seeks to take away the jurisdiction of the Supreme Court and High Courts and thus, now the decision is subject to judicial review. It simply means that the disqualification of a member can be challenged in a court of law.

In 1994 in the SR Bommai case, the SC had said, “There cannot be any presumption of allurement or horse-trading only for the reason that some MLAs expressed the view which was opposed to the public posture of their leader and decided to support the formation of the government by the leader of another political party … many (other) imponderables can result in MLAs belonging to even different political parties to come together. It does not necessarily lead to an assumption of allurement and horse-trading.”

Moreover, in 1994 in Ravi S. Naik v. Union of India, the Supreme Court has held that voluntarily giving up the membership is not the same as resigning from a party. The words “voluntarily giving up membership” connote a wider meaning. Inference can also be drawn from the conduct of the member that he has voluntarily given up the membership of his party.

Conclusion

Crossing the aisle has been a part of India’s post-election trend ever since the first elections. However, the law on defection certainly has been able to curb the evil of defection to a great extent. But, of course, a very disturbing trend of legislators defecting in ‘groups’ to another party in pursuit of greener pastures is apparent. The recent instances of defection in state Assemblies and even in Rajya Sabha substantiate this.

The Parliament should take into consideration the important suggestions as recommended by various committees and other eminent persons and cork the loopholes in the law. The issue of disqualification should be decided by the President or Governor on the advice of the Election Commission as advocated by Dinesh Goswami committee. Law Commission in its 170th report in 1999 has suggested that Political parties should limit the issuance of whips to instances only when the government is in danger. Apart from Supreme Court advocate Sanjay Hedge has advocated that Anti-Defection Law has outlived its utility and a major amendment should be made such as anybody who resigns as a legislator or Parliamentarian should be barred from contesting election for at least six years.

Only by considering such recommendations, the Indian politics can completely do away with the ill practices of Aya Ram Gaya Ram and horse-trading and will be able to give teeth to the Tenth Schedule.

Author: Vijay Lakshmi from University Institute of Legal Studies, Panjab University, Chandigarh.

Editor: Tamanna Gupta from RGNUL, Patiala.

Effect of COVID-19 on economy

Reading time: 6-8 minutes.

History has witnessed several pandemics over the centuries, but few as widespread and as disruptive as the ongoing 2019-20 coronavirus outbreak. The virus was first identified in Wuhan in Hubei district of China in late December 2019 and has since found its way to nearly 196 countries and territories across the globe. It causes the ‘Coronavirus Disease 2019’ or ‘COVID-19’ which is characterised by acute respiratory infection, particularly fatal for infants, people of advanced years and those with underlying medical conditions.

 Although it is primarily a situation of grave health crisis, the outbreak has caused in its wake major socio- economic disruptions, with far- reaching consequences. According to a United Nations prediction report, the world economy emerging out of the crisis will see 25 million people out of work and dramatically slashed rates of wages for workers. It warned that the world should prepare for a “significant rise in unemployment and underemployment in the wake of the virus”. As these rather worrisome facts and figures keep emerging, let us explore the factors that shed some light on how a common virus has managed to bring large economies to their knees within such a short span of time.

Pandemic status of COVID-19

The coronavirus has a very high rate of transmission as is evident from the fact that as on 25th March 2020, mere 3 months from the first reported case, there have been around 4, 71,300 known cases of infection worldwide and 21,300 deaths. China, which is the epicentre of the disease, and the European countries of Italy and Spain along with the USA have been the worst hit, cumulatively accounting for around 55% of total number of current cases worldwide.  It was declared as a ‘pandemic’ on 11th March, 2020 by the World Health Organization. A pandemic is defined as “an epidemic occurring worldwide, or over a very wide area, crossing international boundaries and usually affecting a large number of people” A number of countries have imposed a state of total lockdown, including travel restrictions, amid efforts to quarantine citizens in order to prevent community transmission. Indian Prime Minister Narendra Modi announced a complete lockdown of the country commencing on 25th March for a period of 21 days, threatening penal consequences for violators. With people forced inside their homes and business activities suspended, a shutdown of the global economy is looming large.

How is it affecting the economy?

Israeli historian Yuval Noah Harari says ‘this storm will pass… but the choices we make now could change our lives for years to come

As nationwide lockdowns and state- imposed curfews continue- major exports are suspended, shopping malls are left deserted and the lights in theatres and cinema halls have gone dark- it comes as no surprise that unemployment is headed for a historic high. Closure of these establishments have, in turn, hit those businesses, big and small, that were engaged in supplying utilities and services to them- developing a vicious cycle of economic inactivity.

The Chinese economy, owing to its prolonged fight against the viral outbreak, has gone down by about 10% in the first quarter. Estimates of the margins by which US and the European economies are likely to go down are of similar magnitudes, i.e. perilous double- digit drops in GDP, that too assuming that the virus would be contained by the end of second quarter and measures would be relaxed.

As far the Indian economic scenario is concerned, Prime Minister Narendra Modi has asked top verticals within the government, including the Niti Aayog, the Economic Advisory Council to the Prime Minister and Finance Ministry to assess the economic impact of the novel coronavirus. The economy is forecast to grow 5% in current fiscal year, the slowest in 11 years. The Economic Survey had forecast 6-6.5% rise in financial year 20-21, but Covid-19 has hurt recovery prospects. Ill- effects of the pandemic have not spared the Forex and Bond markets either.

The first brunt of the blow would be borne by the tourism, transport and hospitality sectors- leading to a gradual stagnation of the supporting industries. Consumption slowdown is obviously followed by drop in production, which is further aided by the fact that the outbreak has caused workers to flee to villages culminating in unavailability of labour.

Entrepreneurs operating small and medium sized enterprises find themselves in particularly deep waters as poor cash- flow and negligible revenues over prolonged periods are slowly pushing them towards a point beyond recovery and possible permanent closure.

 As the health pandemic is slowly unfolding into an economic pandemic, the world is waiting for the governments to respond, as their support is extremely crucial to ensure that this temporary economic shock does not turn into a permanent one. According to former RBI Governor Dr. Raghuram Rajan, the situation must be dealt with in short- term, achievable steps as it is hardly an appropriate time to roll out big, ambitious projects. Available fiscal resources must be channeled into healthcare first- in securing supply of protective gear and hygiene products, expanding available facilities and building quarantine spaces.

The next step would be identification and allocation of resources for providing monetary benefit to the vulnerable sections of the society- such as the impoverished and the immigrants- who are struggling to keep body and soul together during these trying times. Equally important is to ensure the survival of small and viable businesses, which are fast losing their stronghold in the economy, by providing monetary incentives and subsidized loans to create a bridge between now till they manage to overcome the crisis and secure economic momentum. 

Steps being taken by government & critical analysis

The first step towards mitigating any mishap on part of the government is resorting to clear communication and educating the people about the gravity of the situation. The Indian government must put across very clearly to every citizen that this is a period of national emergency and that pro- active role sought from all of them. Comprehensive data must be released to guide actions, as one cannot hope to win a blind fight.

 In terms of policy decisions, the Prime Minister announced on 24th March, 2020 that Rs. 15,000 Crore has been pumped into the healthcare sector for provision of testing kits, protective gears for doctors, nurses and paramedics and also for expanding the available facilities and increasing accommodative capacity. Although the amount allocated seems substantial, it must be weighed against the fact that there is considerable uncertainty over the duration of the pandemic- currently available estimates of adverse effects of the outbreak might have to undergo sizeable revisions. 

India is yet to announce any substantial and far- reaching policy decision to combat the approaching economic slowdown. In this respect, it can take cue from other leading economies that are rolling out counter- measures. For instance, in the US, Federal Reserves has cut its interest rates to near zero to help consumers and businesses to access cheaper loans. Taking into account an upcoming inevitable rise in NPA’s and possible delinquencies, there is a large demand that the RBI slash its rates before announcing next fiscal policies to manage the country’s plummeting risk and investment capacities. It can also offer partial guarantees to commercial banks, so that they remain incentivized to lend to businesses, particularly the smaller ones.

However, every policy must be implemented only after taking into careful consideration all possible consequences, since one must not forget that the country is currently dealing with a financial system that is severely impaired and efforts must be directed towards rebuilding it and avoiding any path that may lead to further collapse.

Conclusion

The coronavirus outbreak is perhaps the biggest crisis that our generation has had to face. Although the situation demands quick and decisive actions on part of authorities as well citizens, one must not forget to weigh the long- term consequences of these actions. The goal today is not merely to overcome the immediate threats to our health, but also lay to the foundation for a safer world, to emerge on the other side stronger than ever.

Every cloud has a silver lining, and in this situation it can be found in the fact that the entire world has been presented with a profound purpose to unite, and exhibit the kind of compassion which was thought to been buried beneath the frenzy of modern, selfish way of life. One can only hope that humanity is able to derive valuable lessons from this ordeal and that each of us hold life and freedom in the highest regard hereon.

Author: Adrita Biswas from ILS Law College, Pune.

Editor: Ismat Hena from Faculty of Law, Jamia Millia Islamia.