As of April 13, 2020, there are 9,152 confirmed cases of COVID-19 in India. Of these, 857 patients have been cured/discharged and 308 have died. As the spread of COVID-19 has increased across India, the central government has continued to announce several policy decisions to contain the spread, and support citizens and businesses who are being affected by the pandemic. In this blog post, we summarise some of the key measures taken by the central government in this regard between April 7 and April 13, 2020.
Source: Ministry of Health and Family Welfare, PRS.
Health
Supreme Court orders free testing for COVID-19 and provision of personal protective equipment for healthcare workers
Free testing for COVID-19: The Supreme Court held that COVID-19 tests should be free of cost for persons belonging to economically weaker sections as notified by the government and those covered under the Ayushman Bharat scheme, irrespective of whether they are conducted in private or public laboratories. Further, it held that COVID-19 tests may only be carried out in laboratories accredited by the National Accreditation Board for Testing and Calibration Laboratories, or any agencies approved by the World Health Organisation or Indian Council for Medical Research. Prior to this order, tests were free of cost in government laboratories. However, private laboratories were permitted to charge up to Rs 4,500 per test.
Personal protective equipment for healthcare workers: The Supreme Court held that availability of appropriate personal protective equipment (PPE) for front line healthcare workers must be ensured by the government. PPE includes gloves, masks, goggles, face shields, and shoe covers. Usage of PPE must be based on guidelines provided by the Ministry of Health and Family Welfare and the World Health Organisation. Further, it directed the government to promote domestic production of PPE by means such as allowing movement of raw material. Restriction on exports of PPE may also be instituted.
Security for healthcare workers: The Court also noted that healthcare workers treating COVID-19 patients were facing violence by the public due to stigma associated with their potential exposure to COVID-19. The Court held that states and union territories should direct police authorities to provide security to doctors and medical staff in hospitals, places where persons have been quarantined, and while conducting screening visits. Necessary action must be taken against persons who obstruct and commit any offence in respect to performance of duties by doctors, medical staff and other government officials working to contain the outbreak of COVID-19.
Exemptions from customs duty and health cess for certain items
The central government has exempted the levy of basic customs duty and health cess on certain items. These include ventilators, face masks, PPE, COVID-19 testing kits, and items necessary to manufacture these items. The exemptions will remain in force until September 30, 2020.
Financial Assistance
COVlD-19 emergency response and health system preparedness package
The central government approved the COVlD-19 emergency response and health system preparedness package. It will be implemented in three phases from January 2020 to March 2024. The objectives of the package include: (i) strengthening national and state health systems, (ii) support preparedness for COVID-19, (iii) procure essential medical equipment and drugs, (iv) setting up laboratories for surveillance, and (v) biosecurity.
The Ministry of Health and Family Welfare has initiated release of funds for phase 1 of the programme which will last until June 2020. These funds will be utilised for activities such as: (i) developing hospitals and isolation wards for COVID-19 patients, (ii) providing ventilators, (iii) expansion of diagnostic capacities, and (iv) community surveillance for the disease.
Permission granted for partial withdrawal from National Pension System
Subscribers of the National Pension System may make partial withdrawals to fulfil their financial needs. Withdrawals will be permitted on formal request by the subscriber. Funds may be utilised for the treatment of the illness of a subscriber, his spouse, children (including adopted children), or dependent parents.
All pending income tax refunds up to five lakh rupees to be issued
To provide immediate relief to businesses and individuals, all pending income-tax refunds up to five lakh rupees, will be issued immediately. This is estimated to benefit approximately 14 lakh taxpayers. Further, all pending GST and Customs refunds will be issued. This will benefit around one lakh business entities. The total refund granted will be approximately Rs 18,000 crore.
Compensation for Food Corporation of India Employees in case of death due to COVID-19
The central government has approved the proposal for monetary compensation to 1.08 lakh workers of the Food Corporation of India (FCI) including 80,000 labourers who are working to supply food grains across the country. Currently, families of FCI employees are entitled to compensation in the event of death due to terrorist attack, bomb blast, mob attack or natural disaster. However, the regular and contractual labour of FCI are not covered. Under this proposal, all workers on duty will be insured in the event of death due to COVID-19 between March 24, 2020 and 23 September, 2020. Regular labour will be entitled to 15 lakh rupees, contractual labour will be entitled to 10 lakh rupees, category 1 officers will be entitled to 35 lakh rupees, category 2 officers will be entitled to 30 lakh rupees, and category 3 and 4 workers will be entitled to 25 lakh rupees.
NGOs permitted to buy food grains directly from FCI for relief operations
The government noted that NGOs and charitable organisations are playing an important role in providing food to thousands of poor people during the lockdown. To ensure uninterrupted supply of food grain to these organisations, the central government has directed FCI to provide wheat and rice to NGOs at the Open Market Sale Scheme rate. These rates are generally reserved for state governments and registered bulk users. This implies that these organisations can purchase one to ten metric tonnes of wheat and rice at a time from FCI at the predetermined reserve prices.
Increasing financial resources
Reduction in salaries and benefits to Members of Parliament
The centre issued two Ordinances to amend: (i) the Salary, Allowances, and Pension of Members of Parliament Act, 1954 to reduce the salaries of MPs by 30% for a period of one year, and (ii) the Salaries and Allowances of Ministers Act, 1952, to reduce the sumptuary allowance of Ministers by 30% for one year. The government also amended the rules notified under the 1954 Act to reduce certain allowances of MPs for one year, and suspended the MPLAD Scheme for two years. The MPLAD scheme enables members of parliament to recommend developmental work in their constituencies. These changes are being made to supplement the financial resources of the centre to tackle the COVID-19 pandemic. The proposed reduction to the salaries and allowances of MPs and Ministers amounts to savings of around Rs 55 crore, and the suspension of the MPLAD scheme is expected to save Rs 7,800 crore. These measures comprise 0.03% and 4.5% respectively, of the estimated amount required to fight the immediate economic distress unleashed due to COVID.
For more information on the implications of the reduction of salaries and benefits to MPs, please see here.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
The Insolvency and Bankruptcy Code, 2016 is listed for passage in Rajya Sabha today. Last week, Lok Sabha passed the Code with changes recommended by the Joint Parliamentary Committee that examined the Code.[1],[2] We present answers to some of the frequently asked questions in relation to the Insolvency and Bankruptcy Code, 2016. Why do we need a new law?
As of 2015, insolvency resolution in India took 4.3 years on an average. This is higher when compared to other countries such as United Kingdom (1 year) and United States of America (1.5 years). Figure 1 provides a comparison of the time to resolve insolvency for various countries. These delays are caused due to time taken to resolve cases in courts, and confusion due to a lack of clarity about the current bankruptcy framework. What does the current Code aim to do? The 2016 Code applies to companies and individuals. It provides for a time-bound process to resolve insolvency. When a default in repayment occurs, creditors gain control over debtor’s assets and must take decisions to resolve insolvency within a 180-day period. To ensure an uninterrupted resolution process, the Code also provides immunity to debtors from resolution claims of creditors during this period. The Code also consolidates provisions of the current legislative framework to form a common forum for debtors and creditors of all classes to resolve insolvency. Who facilitates the insolvency resolution under the Code? The Code creates various institutions to facilitate resolution of insolvency. These are as follows:
What is the procedure to resolve insolvency in the Code? The Code proposes the following steps to resolve insolvency:
What are some issues in the Code that require consideration?
A version of this blog appeared in the Business Standard on May 7, 2016.
