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Coronavirus: Common View From Employees And Employers Of Small Scale Industry In India

India is the world’s sixth largest economy and third largest in purchase power in 2020. The country has recorded 6% to 7% growth in GDP from 2014 to 2018 and is one of fastest growing economies surpassing China and other countries. The Small Scale Industries and Agriculture produces are the backbone of the country economy but surprisingly the aforesaid Small Scale Industries has been overlooked due to significant political changes for the last 2 decades.

The Truth is that, The Ministry for Small Scale Industry has not even updated their websites with the latest information such as the current number of units in India, number of products they produce in India, and number of employees in India and the government website still projected the data in 1990.

Despite of all such ignorance, the aforesaid Industry has achieved significant growth and served the Domestic as well as Industrial Markets. The employees & employers of the aforesaid Industries have been seriously affected by the Corona Control measures but they have not obtained significant support from the Government agencies and they have been restrained from their daily activities and has lost their income source and they unable to pay the EMI, Rent and they been evicted from their premises, they became defaulter and subsequently the banks, private finance enforced law again them.

This article has not only revolved around various facts about the employees and employers situation during Coronavirus Lock down and has obtained significant feedback from them and, aforesaid feedback and suggestions has been presented before the Hon’ble Minister, Hon’ble Judges and Law makers across this country.

Small & Medium Scale Industry A Review
India is the second largest agriculture production country in the world. People in rural areas contribute 50% of India's GDP and India has contributed 3% of the manufacturing output of the globe. The Textile Industry contributes about 13% Industrial output and has given employment to 45 million people directly. India is the fifth largest producer of automobiles & its components contribute about 10% of India's total GDP.

Many of the people in India rely on the agriculture & textile Industries whereas these two Industries give direct and indirect employment. These Industries have been given jobs to various Industries; from cottage industry to small scale industry and small scale industry to medium scale Industry.

India’s Small & Medium Scale Industry enterprises are not owned by the Richest people like Mukesh Ambani, Gautham Adani, Shiv Nadar, Lakshmi Mittal, Dilip Shanghvi, Cyrus S Poonawalla, Radhakrishnan Domani, Uday Kotak, Azim Premji, Kumar Mangalam Birla, Leena Tewari and Kalanithi Maran but these small & medium scale industries are owned by the small entrepreneurs; invested in approximately 25 Lakhs to 10 Crore Indian Rupees for their plant & machineries and has small group of employees.

There are 110 million people working in Small and Medium Industries and it is almost only giving opportunity for employment but also the main resource of production to meet the domestic market of 1380 million people and Small Scale Industries contributes 45% to 50% of total Indian exports.

Indian Government has been alleged that they are not given significant importance to the small and medium scale enterprises compared to the importance they are giving to the large scale industrialists. At least the Present Government has to immediately redirect their entire attention from any other large scale industries to the aforesaid Small & Medium Scale Industries and thus, the country can regain its economy back through multi-point resources rather than single point resources like large scale operators who are keen for profit motive for their family.

Scenario after Coronavirus spread in 2020
The corona virus spread has changed the small & medium scale entrepreneurs and their dependent employees' life upside down and they are suffering significant financial loss and they don’t have a collective union to bring their voice to Government whereas this article has represented millions of employers and their collective voice to Union / State Governments.

The Government has taken various actions to reduce the impact of the Coronavirus to the Industry by releasing several relief to people but however they have overlooked to set aside several acts such as SARFAESI Act proceedings during the Corona Spread.

The employers who have not able to run their units for more than months are unable to make any profits and they unable to pay the rent to the unit, unable to pay electricity, unable to pay full salary to employees and obviously they unable to pay EMI for their Loans and whereas employees of such units has not obtained salary for several months and unable to pay rent for their house and unable to pay their EMI for their household items.

It is shown in the 2011 census that there were 27.37 million people residing in rental houses and this ratio may be raised twice for this day and many of the small scale industry employees residing in the rental houses. The employers and employees were unable to pay rent to the landlords and many of them were evicted for the last one year. The Government has not enacted any laws to restrain the eviction of business premises or eviction of rented houses during corona lockdown.

None of the employees and employers have sufficient money for purchasing their needs and obviously they suffer to pay the government utility such as electricity, gas etc during the corona Lock down. Government has either reduced the unit price of the electricity, or waived some units of their conception and no bills enacted so far in favor of any.

None of the employees has sufficient money to pay important Equated Monthly Installments (EMI) for their House and employers has no money for paying their EMI for Factory and Machineries and they all literally rely on the helping hand from the Government for enacting a law to prevent auction and restrain the SARFAESI proceeding during the Corona Lock down. Some of the developed countries have even waived loans for the affected but India has not even released a standard moratorium plan to the affected even after the instruction from the Supreme Court.
  • https://www.bloombergquint.com/law-and-policy/loan-moratorium-case-supreme-court-orders-waiver-of-compound-interest-for-all-borrowers

This article has surveyed around 150 over small & medium entrepreneurs in Tamilnadu and their employees and has brought you the real status of their life to the audiences and bring their specific proposal for better relief during the Corona Lock down.

The factors that affect Small & Medium Entrepreneurs (SME)
  1. Limited or Controlled Time Operation
    The Government has found the spread of virus due to the mass gathering in public and thus, they have no other option to limit and control the time of operation for people's welfare. The spread of virus has been monitored by the health ministry and has been headed by the District Collector for control measures and reliefs. Their District collectors have not guided by any specific act and have taken the records from their executives and often announced lockdown on their jurisdiction for weeks, sometimes months and significantly the Small & Medium entrepreneurs have been restrained to operate their business.

    The District collectors has ultimate command of the district, who acted as per the instruction of the state and has announced limited time operation such as 6 am to 12am for some areas & 6am to 10am for some areas base of the virus spread affected in the said area. Though it looks effective to control the virus effect in the country, it seriously damages the operation of the small & medium industry and their livelihoods.

    The major question of facts:
    • Can employers start their factory operation at 6 am?
    • Even so, whether they get employees at 6am?
    • Even so, what production they can make within 4-5 hours?
    • Even so, whether this yield can make profit?
    • Even so, whether they can continue shut for 6 months?
    • How do employers & employees pay their dues?

      The Government employees who are often well paid by the Government have overlooked the facts of the self employed people and their beloved employees. The Government has to swiftly come to the shop floor to take data from the employers rather than taking data from the authorities and thus, they might understand the need for specific enactment of law.

      There are countries across the globe who were seriously affected by the Coronavirus, has not announced such a long lockdown and obviously they came with an act for factory employees and the everyone abided the regulations and hence, the people has sustained their income source, therefore they not fall prey in the hands of authorities and self sufficient to manage their income source during the Coronavirus spread.

      Government restricted the entire production in the name of lock down restrictions, subsequently has hiked the entire basic commodity price twice or thrice and the government has no control over the price of necessary life.

      Will anyone in India cooking be able cook their food without oil? It's impossible to cook Indian food without cooking oils like sunflower oil, soybean oil, vegetable oil, palm oil, coconut oil etc.

      One simple Example:
      The consumable oil, cooking oil, has been increased from M.R.P. 95/- to M.R.P. 175/- per liter within one year on average due to Coronavirus lockdown. India has ranked 25 in production among the world but this is not enough to meet the Indian domestic supply and India has to import the Oil supply from overseas and India is continuing to be the third largest consumer by importing the oil from overseas.

      Some of the intelligent or intelligent business men have been utilizing the gap in the supply to demand and make billions. Government has not taken any action to decrease or control the price of the oil whereas every family is ultimately vulnerable for such hikes.

      There are large numbers of small and medium enterprises involved in producing the consumable oil but they were restricted by lockdown, which has identified the reason for increasing the cooking oil price in the country. Similarly en number of Small scale industries products have been forced to shut down during the lockdown and the prices of all necessary items continue to rise. The Government has to allow the small industries with proper guidelines with WI (Work instruction) for controlling the corona virus spread and let the trade practices continue in the country.
       
  2. Penalty, Fine, Abuses against the Merchants & employees during Corona Spread
    The employers and employees are allowed only for a period of time to earn their bread and butter, whereas most of them have additional responsibility for paying school fees for their children, medical bills to their family members. They literally have no other option for finding over time, where over time has been seen as National Crime and where the authorities have imposed fines and penalties against the employees. Some of the authorities have filed several fake cases against the merchants and they have been beaten and remanded in Jail.

    The merchants are not only abused by the police authorities but also by the local corporation authorities for various reasons that absolutely do not fall under the hands of the merchants.

    The major question of facts:
    • The people who have no income source, how do they pay fine?
    • The people who affected how they face criminal cases or other government proceedings such as the Government sealed the promise etc?

      The Police officers have been equipped with the Lathi (Heavy bamboo stick covered with Iron edges on both sides) and have damaged their vehicles and beaten the merchants, public during the Corona Lock down. The dignity of the employee and employers has been smashed by the police throughout the country and people with totally no income sources have been humiliated by fines and other penalties.

      The District collector is the authority to hear the complaints against any other authority in the jurisdiction and even these IAS officers have beaten the civilians in the Corona lockdown and shown that they have extraordinary power to harass and beat and even kill the public. One of the IAS officers used his police force to stop a marriage and beat people in public and threaten that he will file criminal cases.

      You will be shocked that these kinds of IAS officers are currently in the service in every part of the country and they hide as executives for almost 30 years and harass the public with the given powers. The government has not removed their power as District Magistrate and these officers have not been terminated from and the government is trying to do eye wash action by transferring these kinds of officers from one place to another place or one department to another department and such action does not serve any purpose.
      https://www.youtube.com/watch?v=0uxDH0OWWTI
      https://www.youtube.com/watch?v=6jcGk_dfuVA&t=20s
       
  3. Rented Small Business – Not able to pay Rent, Subsequently has evicted and closed down permanently
    Some of the countries like the UK around the world have enacted new corona laws to protect the tenants from eviction during the pandemic and some of the countries like the USA have suspended their evicted law to help the people. India, the second largest populated country among the world has been locked down over several months. Many of the people have no sufficient money to pay the rent for the houses during the pandemic and absolutely suffer without any basics.

    Question of Facts:
    1. When the Government has taken lockdown measures, where do these people earn from their business?
    2. When the Government has advised them for complete lockdown and how they pay their rent?
    3. Why are there no laws enacted?

      The Government has not any guidelines to landlords and bankers for reducing the rent by certain % from the actual and has not announced any laws to give relief to the employers & employees by reducing the burden on overheads. The eviction laws are still active and have not been suspended yet and landlords across the country have continued to obtain the full rent despite any corona lockdown. Many of the landlords have suspended the utilities of their building and make the people vacate the places. Some of the landlords even beat the tenants (employees) in their home and there were 60% of the country population suffering during the pandemic.

      https://www.reuters.com/article/us-india-landrights-eviction-idUSKCN25E1QY
      https://www.youtube.com/watch?v=98Vk3RSQwcE

      It is alleged that many politicians and their relatives own the land across the country and thus they all hesitate to take initiative to enact a law against forceful eviction during Corona. There are 600 billion people who have no way to pay their rent and they all expect some relief from paying the rent and the government should initiate some guidelines for the same. The landlords who have not collected their rental for 2-3 months, should be waived from related property taxes and such laws will give relief to the tenants as well as the land owners during the pandemic.

      1. Free the Toll Gate for Public in their District Jurisdiction.
      There were a total 566 Toll gates in the National Highways of the country as per 2020 records. Tamilnadu continues to be one of the highest toll payers among all states and pays 11% of toll charges to NHAI. The 48 out of 566 toll gates collect tolls from the Tamilnadu people in Tamilnadu state. None of the Tamil politicians has raised a question against this abusive collection of toll charges and none filed cases in the Apex Court. Since the topic has not given significant scope on the state related dispute, I exempted writing the same and focus on the toll gate atrocities in the country. The Government of India has collected Rs. 1,00,000 Crore Indian annually in various sources by NHAI as per below data.

      https://economictimes.indiatimes.com/news/economy/infrastructure/nhai-to-generate-rs-1-lakh-crore-annually-from-toll-other-sources-in-next-5-years-gadkari/articleshow/71577675.cms?from=mdr

      The Government of India has constituted NHAI (National HighWays Authorities of India) by National HighWays Authorities of India Act 1988 and is responsible for toll collection of several highways under the Union of India. The aforesaid operation started to collect toll for providing a rapid land transport system to the people from 1995 and the collection of profit has not been shared with the state.

      The government has largely used these funds for improving the HighWay infrastructure and has not given any waiver for any Agriculture product transports and Government has to allow all the Agriculture product carriers like Trackers free on their District without any toll gate charge for the farmers and thus, the farmers and consumers were benefited during the lockdown.
       
  4. SARFAESI ACT has not suspended during the Corona Pandemic
    The Private Banks and Finance Companies across the country has unleashed the SARFAESI Act & Continue Auction on properties of the Defaulters and least bothered about the instruction received neither from Hon’ble Judges of Hon’ble High Courts nor the Hon’ble Judges of the Hon’ble Supreme Court.

    The atrocities of the Private Banks exceeds all limits during the corona pandemic by taking advantage of each legal proceedings against the people during the corona pandemic, charging the innocent people with exorbitant interest, invoking auction procedures and harassing the citizens.

    The Government of India has not suspended the SARFAESI Act and Government has not instructed their law enforcement and quasi judicial bodies such as Debt Recovery Tribunal to stop auction during the corona period. It is recorded on 31 May 2021 that the quasi judicial bodies such as Debt Recovery Tribunal across the country actively enforcing the SARFAESI act against the defaulter and them least bothered about the welfare of people and the issued guideline by the APEX Courts in India.

    Example: The Chennai DRT-2 proceeding officer Mr. RAMESH, has issued 28 auction notices during 05-02-2020 to till date. He is literally abusing the petitioners by simply rejecting the plaints and trying to help the banks for the best reason of all. This kind of officer has continued to invoke auction in DRT and ignoring high court direction during the pandemic. The public who suffered losses have no option to go for appeal in DRAT by paying additional fees, even if they have the right for an appeal in High Courts.
Sl. No. DRT/DRAT Name Detail Date
1 Debts Recovery Tribunal Chennai (Drt 2) DRC 17-2018 E-Auction Notice 02/06/2021
2 Debts Recovery Tribunal Chennai (Drt 2) DRC181-2012 Auction Sale Notice 03/05/2021
3 Debts Recovery Tribunal Chennai (Drt 2) DRC 471-2007 Auction Sale 22/04/2021
4 Debts Recovery Tribunal Chennai (Drt 2) DRC 166-2016 Reauction 19/04/2021
5 Debts Recovery Tribunal Chennai (Drt 2) 108-17 Auction Notice 10/03/2021
6 Debts Recovery Tribunal Chennai (Drt 2) DRC 632-16 01/03/2021
7 Debts Recovery Tribunal Chennai (Drt 2) DRC 166-16 Auction Notice 26/02/2021
8 Debts Recovery Tribunal Chennai (Drt 2) DRC 616-17 Auction Notice 26/02/2021
9 Debts Recovery Tribunal Chennai (Drt 2) DRC260-18 Auction Notice 23/02/2021
10 Debts Recovery Tribunal Chennai (Drt 2) DRC 197-2016 E-Auction 10/03/2021
12 Debts Recovery Tribunal Chennai (Drt 2) DRC 21-2016 E-Auction posponed 29/01/2021
12 Debts Recovery Tribunal Chennai (Drt 2) DRC385-2016 e-auction 05/02/2021
13 Debts Recovery Tribunal Chennai (Drt 2) Drc 21-2016 e auction 28/01/2021
14 Debts Recovery Tribunal Chennai (Drt 2) DRC 251-2018 e-auction 11/01/2021
15 Debts Recovery Tribunal Chennai (Drt 2) DRC 457-2018 e-auction sale 21/01/2021
16 Debts Recovery Tribunal Chennai (Drt 2) DRC 632-2016 e-Auction Notice 16/12/2020
17 Debts Recovery Tribunal Chennai (Drt 2) DRC No. 260-2018 e-Auction Notice 18/12/2020
18 Debts Recovery Tribunal Chennai (Drt 2) DRC197-2016 e-auction sale Notice 30/12/2020
19 Debts Recovery Tribunal Chennai (Drt 2) DRC 35-2011 e-auction sale notice 30/12/2020
20 Debts Recovery Tribunal Chennai (Drt 2) DRC 211/2007 E-AUCTION SALE NOTICE 23/12/2020
21 Debts Recovery Tribunal Chennai (Drt 2) DRC No.110/2008 E-Auction Sale Notice 15/04/2020
22 Debts Recovery Tribunal Chennai (Drt 2) DRC No.142/2016 E-Auction Sale Notice 16/03/2020
23 Debts Recovery Tribunal Chennai (Drt 2) DRC No. 160/2015 E-auction Sale Notice 23/03/2020
24 Debts Recovery Tribunal Chennai (Drt 2) E-Auction 19/03/2020
25 Debts Recovery Tribunal Chennai (Drt 2) DRC No.37/2012 in OA No.485/2007 27/01/2020
26 Debts Recovery Tribunal Chennai (Drt 2) DRC No.54/2014 in OA 393/2001 24/01/2020
27 Debts Recovery Tribunal Chennai (Drt 2) DRC No.212/2016 in OA 449/2015 23/01/2020
28 Debts Recovery Tribunal Chennai (Drt 2) DRC No.350/2012 in OA 100/2017 05/02/2020
  • https://www.livemint.com/industry/banking/covid-19-lockdown-karnataka-hc-restricts-banks-from-conducting-auctions-11585292436667.html
  • https://www.thehindu.com/news/national/karnataka/high-court-stays-auction-of-properties-by-banks-during-lockdown/article31177035.ece

The public right to file against Banks in High Courts under Civil Revision Petitions are one of the Decade controversy subject matter and SADLY, most of the petitions against banks were not entertained in High Courts unless it is filed WRIT Petition under Article 226 & 227 and those are allowed rare in rare situation.

The fact is that DRT has continued to bias with banks and continue doing auctions and least bothered about the directions given by Apex courts. The Banker even has continuously doing the e-auction with and without case in the DRT and continues abusing the people during the Corona Pandemic.

Conclusion
The Government of India has to consider the life of millions of SME industries, employers and employees, continue to immediately declare the national wide guidelines for running the small scale industries and announce various subsidies such as loan waivers, electricity subsidy and give various support during the corona pandemic. The Government has ensured all the people are protected as recommended by the Hon’ble court and suspended the auction and other eviction proceedings against the public.


Written By: V. Ravikumar. B.A.LL.B (Hons) - Social worker & Human Rights Pledge
Email: [email protected]

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