Plea in SC highlights plight of people in informal sector, seeks compensation scheme

The petition seeks directions to the Centre to formulate such a scheme and take over the financial burden of the same as States are already under financial distress

informal sector

A petition in the Supreme Court has sought directions to Centre and States to formulate a scheme to compensate those who are economically weaker and engaged in unorganised sector for loss of livelihood. The petitioner is a graduate from IIT and IIM, also a practicing advocate and in his plea he has raised concerns about people in informal sectors who live on daily earnings and have lost all means of incomes due to the nationwide lockdown.

The petitioner recognises that states and UTs are already under financial stress managing the outbreak of COVID19 and hence “the Union of India be directed to provide to each of the states and union territories compensation for the loss of revenue caused to them as also the additional expenditure incurred by them due to Covid-19 including in respect of the recompense to the persons deprived of income during the lockdown”. The petitioner also seeks “operations of the provisions of Section 4 of the Fiscal Responsibility and Budget Management Act 2003 be stayed in the interim to ensure that the same is not a constraint on the Union is discharging its duty as guardian and protector of its citizens”.

Section 4 of the Fiscal Responsibility and Budget Management Act deals with fiscal management principles, such as managing fiscal deficit, government debt, fiscal targets and so on.

The petitioner puts forth the plight of these informal sector workers by stating, “There are innumerable people who are dependent on daily work for earning with no concept of leave or pay when not working. These are not people who are either homeless or in penury but people bravely leading lives by sheer dint of their own effort and earning a livelihood by their work. Such people have not needed to depend on the freebies of the governments as they have proudly till date earned their incomes and met their needs therefrom.”

The petitioner, as an example to the court, identifies people in informal sector as construction workers many are persons who are self employed such as auto drivers, taxi drivers and railway porters and coolies and delivery persons working for e commerce companies and food delivery companies or even drivers engaged by Ola and Uber and freelance electricians and plumbers or even rag pickers; small road side businesses such as puncture shops and small electrical and electronic repair shops and others of such kind.

The petitioner also emphasizes that needs of such persons cannot be just grains and pulses event hey are covered under the National Food Security Act (NFSA). Since these persons are prevented from doing their work during this lockdown, they are not responsible for loss of their livelihood and hence deserve to be compensated by the state which has imposed this lockdown for the larger good.

The petition also points out that “developed countries have offered income transfers given the nature of losses suffered by their citizens due to Covid-19. Given the marginal existence of the self employed and unorganised work force there is thus need to immediately formulate an income recompense scheme aimed at such persons who have lost livelihood due to the lockdown”.

Further, the petition relies on constitutional provisions and states that Articles 14 (right to equality), 19 (right to freedom) and 21 (right to life) stand infringed due to this lockdown. The right to carry on trade and profession has been denied by executive fiat and persons who were self sufficient till 24.03.2020 on which day lock down was announced have been left in the lurch endangering the very right to life of such persons, says the petition.  

The petition prays for a direction to the Centre to formulate a scheme for compensating persons working in the unorganised sector including as self employed for loss of income caused by the lock down imposed to combat Covid-19 and ensure implementation of the same through the States and Union territories. Also, to direct the Centre to compensate all States and Union Territories 100% of the loss suffered by the States in their revenues due to lock down as also 100% of the increase in expenditures incurred by them due to Covid-19 including for the scheme.



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