Soothing tweets will not assuage the fears of industry

The government is trying to convince industry that the Ministry of Home Affairs’ guidelines are not as stringent as they are made out to be. Those managing communications for the government are making valiant efforts, but these are falling flat—primarily because the guidelines are actually stringent.

“#FactCheck. Claim: MHA (ministry of home affairs) Guidelines prescribe penal action against company directors & management, if employees test positive for #COVID-19. Fact: MHA Guidelines misinterpreted. Penalties under DM (disaster management) Act 2005 applicable if offence occurs with consent, cognizance or negligence of employer,” a Home Ministry spokesperson said in a tweet.

This, however, has not allayed the fears of businesspersons. Anil Bhardwaj, secretary general, Federation of Indian Micro and Small and Medium Enterprises (Fisme), told IN that the MHA guidelines give a lot of discretion to the visiting inspectors. “The need of the hour is a pragmatic set of guidelines, taking into account local conditions and after consultation with medical experts. All business establishments are not huge complexes. There may be very small factories,” he said.

At the heart of the problem lie the penalties for offences under relevant sections of the Disaster Management Act (DMA), 2005, and the Indian Penal Code. These, industry points out, are a recipe for harassment at the hands of inspectors.

The DMA says, “Provided that nothing in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised due diligence to prevent the commission of such offence.”

In other words, the onus of proof will be on the entrepreneur; he has to prove his innocence; he is guilty unless proven innocent. “Anybody will hate to be in a situation where he has to prove his innocence,” says Yatinder Chaudhary, a lawyer practicing in the Supreme Court.

Official tweets and oral assurances anyway can’t override an Act.

The law is so harsh that even a top official, Union Labor & Employment Secretary Heera Lal Samariya, told a business daily that the criminal penalties should be done away with: “Companies should follow the Ministry of Home Affairs (MHA) guidelines…The most important [element] is that there should not be any criminality [clause] and I fully agree with you. [I] will take it up at the highest level,” Samariya said during an interaction with the Federation of Indian Chambers of Commerce & Industry or Ficci via videoconferencing.

The fears of industry are thus real; these can’t be dispelled by tweets or oral assurances. It is true that the government, having invoked a law, cannot go against its letter. However, it has the power to bring out an ordinance to dilute the penal provision, which it hasn’t done. After all, the government did bring an ordinance to protect doctors, nurses, and the paramedic staff.

This is reminiscent of the Narendra Modi government’s attitude towards retrospective taxation which was introduced by the previous United Progressive Alliance regime in 2011. In April 2015, in an interaction with American businesspersons in Washington, Finance Minister Arun Jaitley ruled out the use of retrospective taxation: “As far as retrospective taxation is concerned, I think India’s experience of the 2011 law has been very adverse, and therefore if any government did indulge in that misadventure ever in the future, the cost involved will be too heavy.”

He was asked: “What would you say to an investor who says, ‘I can trust you, Mr Jaitley, I can trust this government, but as long as that law remains on the books, how can I be sure that in seven years, or in eight years, or in 10 years, or 12, it is not misused by another government that does not share your intentions?”

To this, he had no rational answer, so he came up with lawyerly disingenuousness: “I can’t override parliamentary sovereignty. I can’t bring a law that says Indian Parliament loses its right to ever enact a law retrospectively, even if I did that it would be illegal, every legislature has that power.”

Disingenuousness because the issue was not parliamentary sovereignty; no businessman, Indian or American, wants this sovereignty to be undermined. But discarding a bad law doesn’t undermine any legislature.

Evidently, Jaitley was not serious in allaying the fears of investors. Unfortunately, the lack of seriousness is also apparent in helping entrepreneurs restart their businesses today..