Governments need to be wary of misplaced, reflexive over-regulation.
Gaurav Sansanwal | May 5, 2020
Fear is the Indian bureaucrat’s best friend. As the fear of Covid-19 grips people, an opportunity has arisen—for the regulatory inspectors to make the country dance to their tunes. Taking advantage of the doctrine of ‘necessity’, and under the garb of self-defined ‘emergency’ powers, central and state governments have issued a bunch of guidelines, which seek to reopen the economy—in a manner, that best suits the judgment of the ‘know-it-all’ Indian bureaucracy.
This is problematic in many ways. Firstly, because—from granting diagnostic licences to allowing inter-sectoral production of medical equipment—an analysis of the response so far will suggest that better policy responses to the Covid-19 emergency have been the ones which suspend regulations that impede the market from responding to consumer demand. Secondly, by choosing to make regulations that are mere sops to various special interests, and lobbies—the fate of our citizens has been left in the authoritarian hands of the police, and administrative officials. Finally, reliance on age-old regulatory jargon has meant that the peculiar challenges of this medical emergency have been ignored.
The Ministry of Home Affairs (MHA) guidelines: A bureaucratic jumla?
The MHA has forayed into the realm of market regulation by passing Order dated 15.04.2020, and the subsequent Order dated 24.04.2020. Clause 14 of the Order dated 15.04.2020 enlists the commercial, and private establishments, which have been given the go-ahead to operate. While E-commerce companies were initially given the permission to operate, the same was revoked even before they could start operations, under pressure from the lobby of brick and mortar shop owners. Thereafter, vide Order dated 24.04.2020, MHA ruled that outside the limits of municipal corporations, and municipalities—registered shops operating in ‘residential complexes’ and ‘market complexes’ will be allowed to conduct operations. Within the limits of municipal corporations and municipalities, however, only ‘neighbourhood shops’ and ‘standalone shops’ will be permitted, and ‘market complexes’ would remain shut. Shops in multi-brand, and single-brand malls will remain shut both inside, and outside the limits of municipal corporations.
At the outset, the MHA has ignored that from the perspective of risk factor—all ‘municipalities’ are not similarly situated, and further that markets outside ‘municipalities’ can often be worse off, because of preparedness-related vulnerabilities. Take, for example, the case of Goa—which has not reported a single case of coronavirus since 03.04.2020 . The Panaji municipality, therefore, cannot possibly be equated with the one in Jabalpur—which still has around 20 cases [at the time of writing], despite successfully limiting the spread of the contagion.
A better alternative would have been to lay down ground rules, defining the ‘new normal’—leaving each district free to decide if it was in a position to start staggered re-opening. In the context of Covid-19, the laying of ground rules would include determining the amount of social distancing which is to be maintained, or specifying the good practices, and standards for disinfectant measures.
Pictures of overcrowding in many markets across the country demonstrate that consumer needs determine market demand. It is, therefore, better to ensure that social distancing is maintained, and that people are wearing masks—than to determine whether the shop exists in what for the purposes of law—is a ‘residential complex’ or a ‘market complex’. And while we are at it, is it not easier for a ‘market complex’ to build collaborative capacity, and raise resources, which may be needed for the shop owners to regularly disinfect, and maintain social distancing? Why is it, then, that market complexes have been asked to remain shut even in those municipalities, where ‘stand-alone shops’ are not present?
Bureaucrats in the home ministry have sought to single-handedly prescribe what will open, where, and at what pace—in all of fifteen pages. And nothing speaks of the inadequacy of it all, in as much as the fact that the guidelines are mum on e-commerce platforms. This has resulted in ambiguity, and will further leave the delivery boys, at the mercy of policemen.
State government guidelines: a return to Licence Raj?
While a deplorable set of guidelines have been issued by various state governments, the ones set by bureaucrats in Kerala, and West Bengal deserve special attention.
The highly prescriptive list of directions in Kerala is devoid of any logic. Bureaucrats in Kerala have resorted to possibly the oldest trick in the Licence Raj playbook: limitation of economic activity by prescribing time, and limiting scale. While takeaway in restaurants is allowed only till 8 pm, one is allowed to ‘order-in’ till 10 pm. While repair shops for all ‘electronic gadgets’ are allowed, the purchase of new ones is limited to ‘electric fans’. While textile- making is permitted, textile shops will remain closed—even as liquor shops are open. And of course, government offices will continue to work for all five working days. If the object is to function with minimal health risk, are we not better off laying down some ground rules backed by scientific standards, and leave the people to decide what they want to buy, and when? Not only will prescribing time lead to over-crowding, but limiting the scale—to say, selling of electric fans, will potentially lead to harassment of businesses. If this is not a return to Licence Raj, what is?
The tremors of the return to Licence Raj can also be felt in West Bengal. The government has considered the sale of sweets, and flowers—to be critical to the economic life of the state. And so, one is allowed to buy sweets, and flowers—but only till noon. Most other shops have been kept shut. I am forced to wonder if restricting economic activity by placing time limitations of this kind will result in over-crowding, and violation of social distancing norms. Some manufacturing activity has resumed, but only those with ‘permission’ from government are allowed to operate. Over 50 jute mills have accordingly asked for permission, but for reasons best left unsaid, only 5 have received permission. If this is not regulation without sound public justification, what is?
The very fact that we are today considering the opening up of economy by incurring minimal, but significant health risk from the perspective of human life, shows the importance that economic activity has to modern-day social life. Governments are eager to re-open the economy, but while doing so, they need to be wary of misplaced, reflexive over-regulation.
Gaurav Sansanwal is an advocate, and has an active practice of law, before various courts and tribunals in Delhi.
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