Government of Chhattisgarh’s response to the COVID-19 pandemic

Anurag Vaishnav - April 21, 2020

In response to the COVID-19 pandemic, the central and state governments have implemented several measures to reduce the spread of the disease and provide relief for those affected by the it. In this blog, we look at some of the key measures taken by the Government of Chhattisgarh with regard to public health, ensuring supply of essential commodities and providing relief to affected persons.

COVID-19 cases in the State

As of April 21, 2020, Chhattisgarh has 36 confirmed cases of COVID-19. Of these, 11 are active cases, and 25 patients have been cured or discharged. This is illustrated below in Figure 1.

Figure 1: Day wise COVID-19 Cases in Chhattisgarh

Sources: Ministry of Health and Family Welfare, Government of India; PRS.

Key measures taken by the State Government

On March 13, 2020, the Department of Health and Family Welfare notified the Chhattisgarh Epidemic Disease, COVID-19 Regulations, 2020. Key provisions of the regulations include:

The district collector can take necessary actions such as sealing geographical area of the district and ban vehicular movement, in order to prevent the spread of the epidemic. Further, the district administration may take measures such as closure of schools, offices and banning public gatherings.
In order to avoid rumours and unauthenticated information, no person or institution can use any print or electronic media for information regarding COVID-I9 without prior permission of Health Department.
All health facilities (including private) should have COVID-19 corners for screening of suspected cases. Further, they should record travel history of a person if he has travelled to an area affected by COVID-19.

Movement restrictions: Following these regulations, the government announced several additional measures to restrict movement of people to contain the spread of COVID-19.

On March 19, the Transport department stopped running of all inter-state buses in the state to restrict movement to and from the state. On March 21, all city bus services in urban areas of the state were suspended. This was followed by stoppage of all transport including auto, taxi and e-rickshaws.
On March 22, the government announced a lockdown in all urban areas of the state till March 31 during which all offices, institutions and other activities were to remain closed. Essential services such as medical shops, vegetable shops, petrol pumps, electricity and water supply services were open.
On March 25, the central government announced on a 21-day country-wide lockdown till April 14. On April 14, the lockdown was further extended till May 3, 2020.

Essential Goods and Services: Following the lockdown, the government notified certain additional essential goods and services that will remain unaffected by the lockdown. These are noted below:

On March 13, 2020, the central government notified hand sanitisers, surgical masks and N-95 masks as Essential Commodities. This implies that the government can regulate the product, supply and pricing of these items. Following this, the state government notified that the district administration should monitor the price of surgical masks, N-95 masks and hand sanitisers in each district of the state.
On March 24, the state department of Food and Public Distribution notified certain additional essential goods and services under the Essential Commodities Act, 1955. These include: (i) wheat and rice mills, (ii) operations of items used in acquirement or storage of items under the Public Distribution System, such as fertilisers, (iii) supply of Petrol, Diesel, CNG and LPG, among others.
On April 15, the Ministry of Home Affairs issued guidelines on the measures to be taken by state governments until May 3. As per these guidelines, select activities will be permitted in less-affected districts from April 20 onwards to reduce the hardships faced by people. Permitted activities include: (i) health services such as hospitals, clinics, and vets, (ii) agriculture and related activities such as fisheries and plantations, (iii) MNERGA work, (iv) construction activities, and (v) industrial establishments.

Relief measures: During the lockdown, the state government announced several measures to provide relief to the affected individuals. Key measures include:

Rice for two months will be provided in April to all beneficiaries under the Public Distribution System. Antyodaya & Annapurna ration card holders will also get sugar and salt for two months in April. Two quintal of rice is allocated to every gram panchayat, which can be utilised for distribution to individuals without ration cards, subject to a maximum of 5 kg for an individual.
4 kg of rice at primary level and 6 kg at upper primary level will be provided to school children under the Mid-day Meal Scheme, on account of closure of schools. Further, arrangements will be made to provide ready to eat take home rations for undernourished children between the age of 3 to 6 at Aanganwadi centres.

The government approved sanction of MLA funds for corona virus prevention and other necessary arrangements and support. The Chief Minister announced that there will be no mandatory deduction from salaries of state government officials and employees for pandemic relief.
The state’s Labour Department sanctioned Rs 3.8 crore to aid labourers affected due to lockdown.
Pending taxes, interest and penalties of bus and truck operators of nearly Rs 331 crore to be waived off.

Health Measures: Over the last few weeks, the government issued several guidelines and orders on containment of the virus, patient handling and protection of healthcare workers. Some of these are noted below:

On March 23, the government of Chhattisgarh declared Corona Virus as a "Notified Infectious Disease" under the Chhattisgarh Public Health Act, 1949. Further, it notified measures to be taken for prevention of spread of COVID-19 at industries and workplaces. These included restricting the number of employees at workplaces, and ensuring sanitisation at workplace.
Guidelines regarding bio-medical waste in quarantine homes and camps were notified. These guidelines provide that all workers involved in waste collection should be provided with personal protective equipment. Further, vehicles carrying such waste should be sanitised with 1% hypochlorite after every trip.
On April 11, the Department of Health and Family Welfare made it mandatory to wear a mask for all persons while stepping out of their house for any public place.
The department also released guidelines for patients cured of COVID-19. These guidelines provide that such persons should be escorted to their home district from the hospital and regular monitoring and supervision of their health should be ensured by the district administration.
Further, the department released guidelines for continuation of other hospital services during COVID-19 outbreak. The guidelines provide that the patients should be advised on phone as far as possible, and should be given separate timings for in-person appointments to avoid congestion at hospitals. On April 18, the Chief Minister announced an online health consultation website for patients, through which patients can seek free of cost advice from doctors.

For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.

Legislation

Resolving failure of financial firms: The FRDI Bill explained

Gayatri Mann - October 12, 2017

The Financial Resolution and Deposit Insurance Bill, 2017 was introduced in Parliament during Monsoon Session 2017.^[1] The Bill proposes to create a framework for monitoring financial firms such as banks, insurance companies, and stock exchanges; pre-empt risk to their financial position; and resolve them if they fail to honour their obligations (such as repaying depositors). To ensure continuity of a failing firm, it may be resolved by merging it with another firm, transferring its assets and liabilities, or reducing its debt. If resolution is found to be unviable, the firm may be liquidated, and its assets sold to repay its creditors.

After introduction, the Bill was referred to a Joint Committee of Parliament for examination, and the Committee’s report is expected in the Winter Session 2017. The Committee has been inviting stakeholders to give their inputs on the Bill, consulting experts, and undertaking study tours. In this context, we discuss the provisions of the Bill and some issues for consideration.

What are financial firms?

Financial firms include banks, insurance companies, and stock exchanges, among others. These firms accept deposits from consumers, channel these deposits into investments, provide loans, and manage payment systems that facilitate transactions in the country. These firms are an integral part of the financial system, and since they transact with each other, their failure may have an adverse impact on financial stability and result in consumers losing their deposits and investments.

As witnessed in 2008, the failure of a firm (Lehman Brothers) impacted the financial system across the world, and triggered a global financial crisis. After the crisis, various countries have sought to consolidate their laws to develop specialised capabilities for resolving failure of financial firms and to prevent the occurrence of another crisis. [2]

What is the current framework to resolve financial firms? What does the Bill propose?

Currently, there is no specialised law for the resolution of financial firms in India. Provisions to resolve failure of financial firms are found scattered across different laws.² Resolution or winding up of firms is managed by the regulators for various kinds of financial firms (i.e. the Reserve Bank of India (RBI) for banks, the Insurance Regulatory and Development Authority (IRDA) for insurance companies, and the Securities and Exchange Board of India (SEBI) for stock exchanges.) However, under the current framework, powers of these regulators to resolve similar entities may vary (e.g. RBI has powers to wind-up or merge scheduled commercial banks, but not co-operative banks.)

The Bill seeks to create a consolidated framework for the resolution of financial firms by creating a Resolution Corporation. The Resolution Corporation will include representatives from all financial sector regulators and the ministry of finance, among others. The Corporation will monitor these firms to pre-empt failure, and resolve or liquidate them in case of such failure.

How does the Resolution Corporation monitor and prevent failure of financial firms?

Risk based classification: The Resolution Corporation or the regulators (such as the RBI for banks, IRDA for insurance companies or SEBI for the stock exchanges) will classify financial firms under five categories, based on their risk of failure (see Figure 1). This classification will be based on adequacy of capital, assets and liabilities, and capability of management, among other criteria. The Bill proposes to allow both, the regulator and the Corporation, to monitor and classify firms based on their risk to failure.

Corrective Action: Based on the risk to failure, the Resolution Corporation or regulators may direct the firms to take certain corrective action. For example, if the firm is at a higher risk to failure (under ‘material’ or ‘imminent’ categories), the Resolution Corporation or the regulator may: (i) prevent it from accepting deposits from consumers, (ii) prohibit the firm from acquiring other businesses, or (iii) require it to increase its capital. Further, these firms will formulate resolution and restoration plans to prepare a strategy for improving their financial position and resolving the firm in case it fails.

While the Bill specifies that the financial firms will be classified based on risk, it does not provide a mechanism for these firms to appeal this decision. One argument to not allow an appeal may be that certain decisions of the Corporation may require urgent action to prevent the financial firm from failing. However, this may leave aggrieved persons without a recourse to challenge the decision of the Corporation if they are unsatisfied.

Figure 1: Monitoring and resolution of financial firms

Sources: The Financial Resolution and Deposit Insurance Bill, 2017; PRS.

How will the Resolution Corporation resolve financial firms that have failed?

The Resolution Corporation will take over the administration of a financial firm from the date of its classification as ‘critical’ (i.e. if it is on the verge of failure.) The Resolution Corporation will resolve the firm using any of the methods specified in the Bill, within one year. This time limit may be extended by another year (i.e. maximum limit of two years). During this period, the firm will be immune against all legal actions.

The Resolution Corporation can resolve a financial firm using any of the following methods: (i) transferring the assets and liabilities of the firm to another firm, (ii) merger or acquisition of the firm, (iii) creating a bridge financial firm (where a new company is created to take over the assets, liabilities and management of the failing firm), (iv) bail-in (internally transferring or converting the debt of the firm), or (v) liquidate the firm to repay its creditors.

If the Resolution Corporation fails to resolve the firm within a maximum period of two years, the firm will automatically go in for liquidation. The Bill specifies the order of priority in which creditors will be repaid in case of liquidation, with the amount paid to depositors as deposit insurance getting preference over other creditors.

While the Bill specifies that resolution will commence upon classification as ‘critical’, the point at which this process will end may not be evident in certain cases. For example, in case of transfer, merger or liquidation, the end of the process may be inferred from when the operations are transferred or liquidation is completed, but for some other methods such as bail-in, the point at which the resolution process will be completed may be unclear.

Does the Bill guarantee the repayment of bank deposits?

The Resolution Corporation will provide deposit insurance to banks up to a certain limit. This implies, that the Corporation will guarantee the repayment of a certain amount to each depositor in case the bank fails. Currently, the Deposit Insurance and Credit Guarantee Corporation (DICGC) provides deposit insurance for bank deposits up to 1 lakh rupees per depositor.[3] The Bill proposes to subsume the functions of the DICGC under the Resolution Corporation.

[1]. The Financial Resolution and Deposit Insurance Bill, 2017, http://www.prsindia.org/uploads/media/Financial%20Resolution%20Bill,%202017/Financial%20Resolution%20Bill,%202017.pdf

[2]. Report of the Committee to Draft Code on Resolution of Financial Firms, September 2016, http://www.prsindia.org/uploads/media/Financial%20Resolution%20Bill,%202017/FRDI%20Bill%20Drafting%20Committee%20Report.pdf

[3]. The Deposit Insurance and Credit Guarantee Corporation Act, 1961, http://www.prsindia.org/uploads/media/Financial%20Resolution%20Bill,%202017/DICGC%20Act,%

Home

MPs & MLAs

Legislatures

Parliament

State

Bills & Acts

Budgets

Policy

LAMP

Careers