Plea in SC to Formulate a Scheme by Center and States to Compensate the Unorganized Sector Workers

A plea of Civil Writ Petition in the public interest under Article 32 of the Constitution of India for the enforcement of Fundamental Rights under Articles 14, 19 and 21 of the citizens, was filed by  Mr. R Subramanian in the Supreme Court for seeking the directions to the center for formulating a scheme for the workers of the unorganized sector to compensate their losses incurred due to the Coronavirus lockdown through the states and union territories.

The Petitioner in person Advocate Mr. R Subramanian stated in his petition that around 90% of the total workforce of our country is employed in the unorganized sector like many of them are self-employed as construction workers, auto drivers, railway porters, coolies, delivery persons working for e-commerce companies, drivers engaged by Ola & Uber services and freelance electricians, plumbers and even rag pickers.

The petitioner also pointed towards the Fiscal Responsibility and Management Act (FRBM) which restricts the excess spending by the Union over its expenditure while Section 4(2) of the FRBM allows some exceptions like in the case of national security, an act of , national calamity, etc and Section 4(3) of the FRBM limits the waiver in this regard too. So, he urged the Court to suspend the operation of Section 4(3) of FRBM Act for at least this Fiscal year (2020-2021) due to the huge suffered losses by the unorganized sector in the unprecedented Coronavirus lockdown to enable the Center to support the states with necessary and adequate funds which are not be constrained by the prescribed FRBM limits so that, the Center and States will work together to formulate a scheme to compensate the losses of incomes and livelihoods of the economically weaker sections of society because the States and Union Territories are the eventual agents with a responsible duty of delivering the social welfare services to those who are facing extreme financial strain.

What are the Fiscal management principles

(1) The Central Government shall,—

(a) Take appropriate measures to limit the fiscal deficit up to three percent of gross domestic product by the 31st March 2021;

(b) Endeavour to ensure that—

(i) The general Government debt does not exceed sixty per cent.;

(ii) The Central Government debt does not exceed forty per cent., of gross domestic product by the end of the financial year 2024-2025;

(c) Not give additional guarantees with respect to any loan on the security of the Consolidated Fund of India in excess of one-half percent. of gross domestic product, in any financial year;

(d) Endeavor to ensure that the fiscal targets specified in clauses (a) and (b) are not exceeded after stipulated target dates.

 (2) The Central Government shall prescribe the annual targets for the reduction of fiscal deficit for the period beginning from the date of commencement of Part XV of Chapter VIII of the Finance Act, 2018 and ending on the 31st March 2021: Provided that exceeding annual fiscal deficit target due to ground or grounds of national security, the act of war, national calamity, the collapse of agriculture severely affecting farm output and incomes, structural reforms in the with unanticipated fiscal implications, a decline in real output growth of a quarter by at least three percentage points below its average of the previous four quarters, may be allowed for the purposes of this section.

(3) Any deviation from the fiscal deficit target under sub-section (2) shall not exceed one-half percent of the gross domestic product in a year.

(4) The Central Government shall, in case of an increase in real output growth of a quarter by at least three percentage points above its average of the previous four quarters reduce the fiscal deficit by at least one-quarter percent of the gross domestic product in a year.

(5) Where the fiscal deficit is allowed to vary from the target prescribed under the proviso to sub-section (2) or deviation is initiated under subsection (4), a statement explaining the reasons thereof and the path of return to annual prescribed targets under this section shall be laid, as soon as may be, before both the Houses of Parliament.


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