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A plea has been filed in the Supreme Court seeking a direction to the Centre to formulate a scheme for compensation for the losses incurred by workers of the unorganised sector as a result of the Coronavirus lockdown.
The plea filed by Advocate R Subhramanian also states that after the scheme is formulated, the government should implement it through the states and union territories.
The petitioner has also sought a direction to the Centre to "compensate all States and Union Territories 100% of the loss suffered by the States in their revenues due to lock down".
It is stated that Fiscal Responsibility and Budget Management Act (FRBM) restricts excess spending by the Union over its expenditure. Section 4(2) of the FRBM allows exceptions in case of national calamities, and Section 4(3) limits the waiver in this regard.
The plea states that due to the unprecedented lockdown, the unorganised sector has suffered huge losses. Thus, the Court should suspend the operation of Section 4(3) of FRBM Act “at least for Fiscal year 2020-21 to enable the Union to do its duty to support the states with necessary funds and not be constrained by FRBM limits.”
Making a case for the suspension of the FRBM Act, the plea states that revenue sources of states have collapsed in view of the lockdown, as even the sin tax revenue from tobacco and liquor are not available.