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Industry says facing Covid penalty threat, asks Centre for clarification

Owners of small businesses are also concerned over the instruction to offer residential facilities to workers, so as to ensure they are not exposed to the virus, saying this might not be possible for them unlike larger units.

Written by Pranav Mukul , Aanchal Magazine , Prabha Raghavan | New Delhi | Updated: April 22, 2020 11:28:47 am
India lockdown, india lockdown industries, industries resume work, coronavirus, coronavirus impact on economy, coronavirus impact on industries Owners of small businesses are also concerned over the instruction to offer residential facilities to workers, so as to ensure they are not exposed to the virus, saying this might not be possible for them unlike larger units.

A day after some industries were allowed to start functioning with conditions, both small and large companies in pockets across the country have said that the interpretation of punitive measures for violation of safety procedures is proving a big deterrent in resumption of operations.

While punitive norms are fine for units not following safety and sanitisation procedures, industry representatives say, they have raised red flags over action being prescribed by state and local authorities against companies and their owners in case any of their workers test positive for COVID-19.

In a set of suggestions sent to the government Tuesday, the CII asked it to clarify this, saying units were being threatened with up to three months of shutdown. The Gems and Jewellery Export Promotion Council called the guidelines too “harsh” in a representation to the Commerce Ministry.

Similar apprehensions were expressed by a number of small units at the Manesar auto hub, on the outskirts of the national capital, which too partially resumed operations on Monday. They said that even as the district administration was encouraging them to restart, authorities hinted at punitive action if any worker tested positive for coronavirus.

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In its letter to the government, the CII (Confederation of Indian Industry) said, “Local administrations are insisting that there will be criminal charge on the establishments with order for three months shutdown if anyone in the establishment is found to be testing positive. Establishments can be held responsible for violating spatial or sanitary norms, but not if someone in the company gets COVID. This needs to be clearly directed from the Central to all state governments.”

The Engineering Export Promotion Council of India, which has 13,000 members across India, said only 10-15% of them were in the process of opening up operations, while 40-50% are awaiting permits from states. “But, even if these companies get permission, they are hesitant to start and might hold back until they get clarity on whether this clause (for punitive action) is explained, deleted or enforced,” Chairman Ravi Sehgal said.

Such a clause could make efforts to restart operations in export-oriented sectors a “non starter”, especially for micro, small and medium enterprises (MSMEs), he added. “We can follow all the guidelines set forth by the Home Ministry, but penalties or punishment for owners in the event a case is found should be removed. Instead, the government should cooperate with such owners further to take corrective action.”

Owners of small businesses are also concerned over the instruction to offer residential facilities to workers, so as to ensure they are not exposed to the virus, saying this might not be possible for them unlike larger units.

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K E Raghunathan, a Chennai-based SME owner and former national president of the All India Manufacturers’ Organisation, said, “In reality, the relaxations have not helped the MSMEs. With six main industrial states — Tamil Nadu, Maharashtra, Gujarat, Punjab, Karnataka and Delhi — not allowing resumption of work, raw material supply and finding labour are issues. Almost 80% of MSMEs situated in non-confinement areas have not been able to open. In the rest, only about 20-23% workers turned up and carried out just preparatory work.”

Raghunathan also asked how the factory owners were supposed to make arrangements for workers to stay on the premises with no shop open for supply of even bedding.

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In its representation to the Commerce Ministry Tuesday, seen by The Indian Express, the Gems and Jewellery Export Promotion Council said it was not right for a factory owner to be held responsible for a worker getting infected as this could have happened during non-working hours or at home. “An FIR will be lodged against the owner and the factory sealed for 14-28 days,” it said, quoting from the directives. “Therefore factory owners are scared. It is a deterrent for units to start functioning.”

An official of the council questioned this “very high” cost of compliance, particularly when companies are up against competition from other countries. Requesting anonymity, the official said, “China has opened up fully and is poaching our orders. During this difficult time, the government should facilitate the industry instead of deterring it through punitive action.”

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