Ex-Gratia to the Families of Covid-19 Victims Makes Political Sense!

Two separate pleas seeking directions to the Centre and States to provide Rs 4 lakh ex-gratia to the families of which the bread-winner died of Covid-19 as provisioned under the Disaster Management Act of 2005 and a uniform policy for issuing death certificates to those succumbing to the Corona virus have recently come up for hearing before the Supreme Court.  

Presenting his plea, the advocate said that since Covid-19 has been declared as a disaster, every family whose member dies due to disaster is entitled for ex-gratia of Rs 4 lakh under Sec12 (iii) of the Disaster Management Act of 2005. He further pleaded that hundreds of persons who were engaged in such services as health care dept., police dept. municipal sanitary dept., etc., died while attending Covid-19 relief works and in many cases they were the “sole bread earner” for the whole family.

Hearing the pleas, the Supreme Court made three observations: One, terming the present process of issuing death certificate as “prima facie more complicated”, asked the Solicitor General to do the needful to ensure that families of those who died of covid-19 get proper death certificate so that they can avail benefits of the welfare schemes; two, enquired whether the National Disaster Management Authority headed by the Prime Minister has taken a decision not to pay Rs 4 lakh ex gratia to the families of victims of covid-19; and three, whether uniform guidelines on compensation can be framed under the Act “otherwise there will be heartburn. Somebody will get some money and others will get more”.

The centre, in an affidavit filed before the Supreme Court on June 21 said that as the finances of State and Central governments are under severe strain owing to poor tax revenues and increased expenditure on healthcare due to the pandemic, payment of ex-gratia to all diseased persons due to COVID-19 is beyond the fiscal affordability of the government. It also said, “It is an unfortunate but important fact that the resources of the government have limits and any additional burden through ex-gratia will reduce the funds available for other health and welfare schemes”. The Court has however reserved its judgement on these petitions.

This submission of the Centre rather sounds baffling. For, as per the latest statistics, total deaths owing to covid-19 stand at 3 90 691 and if all these families are to be compensated, the required financial outlay would be Rs 15 627 crore, which hardly comes to 0.44% of the estimated expenditure of the Centre’s budget for fiscal 2022.

Intriguingly, this financial outlay of Rs 15 627 crore is even less than the loss of Rs 19780 crore that Nirav Modi (Rs 12700 crore) and Mehul Choksi (Rs 7080 crore) together said to have caused to Punjab National Bank by their fraudulent acts.  

The recently approved takeover of Videocon Industries ltd by Vedanta group company in India’s first group insolvency resolution is said to result in a recovery of Rs 3000 crore against claims of around Rs 62 000 crore. These incidents clearly show how banks are being bled by the defaulting corporates floated by the rich entrepreneurs of the nation.

As per the latest data, Indian banks have written off loans worth around Rs 8 83 168 crore in the last ten years, of which PSBs alone have written off Rs 6 67 345 crore—a neat 76% of the total loans written off in the decade. And what is more important to be noted here is: a major chunk of these loans was availed by the companies floated by the top 1% of the wealthiest population of the country. 

Over it, to augment the capital of these loss-making PSBs, government has cumulatively infused Rs 3.16 lakh crore over the past five years (2015-16 to 2019-20) through budget. Compared to these losses that the Centre— the majority shareholder of PSBs—suffered, the financial outlay under the ex gratia payment to Covid-victim’s families simply pales. 

When looked at from a perspective that payment of ex gratia evades the likely contraction in consumer demand that might otherwise result due to the death of the sole bread-earner of such victim’s families, it turns out to be a stimulus to the economy. 

Imagine what would be the woeful plight of those families which are on the poverty-line/in the lower middle-income group  and eking out their lives through daily wages/meagre monthly salaries, should the bread-earner die due to Covid-19! They will not only fall below poverty line but also remain chronically poor for years to come. And such families would likely to be many. They need all the support—not only ex gratia but also long term support to come out of poverty—from the sane society and that is what the government indeed is for. Such benevolence makes a great political sense too!  

Cumulatively, payment of ex gratia merits government’s consideration. Of course, while framing uniform guidelines for such payment, Centre, in consultation with States, can limit such benefit to families within a certain income level. Such a gesture portrays the government with a human face. And that is what poor families look for in the hour of catastrophe.