Covid 19 : Impact on Profession & Professionals
Hope this finds you safe & healthy. It is my pleasure to share with you my views to equip you with critical insight into the most defining moment of our existence.
Covid – 19, the pandemic, that began in Wuhan, China in December 2019, spread exponentially, has now infected hundreds of thousands of people & has claimed thousands of lives. It has spread through out the globe, spared none of the countries, either developed or developing or underdeveloped. On 11-3-2020, the World Health Organisation ( WHO ) declared it a “pandemic” but also stated that it can be “contained”. Various measures have been implemented by various Governments across the globe like closed borders, travel bans, states of emergency , restriction of mass gatherings, quarantines, business lock-down etc.
Covid – 19 has created extraordinary situation & therefore it needs an extraordinary response. Govt. of India quickly precipitated a public health emergency. Janta Curfew was imposed on 22nd March as a preventive measure which was followed by locked down for 3 Weeks from 24th March to 13th April & another lock down from 14th April to 3rd May & then 4th May to 17th May. Ministry of Health & Family welfare issued an advisory on “ Social Distancing “ to combat the spread of corona virus. But these Regulations & restrictions banning large public gathering, banning various local national & international events, concerts, conferences etc dented the business & also the economic lines of nation, virtually the world. The Crisis that the nation, rather the World is facing due to this uncontrollable corona virus is not only unprecedented but also damaging on multiple fronts.
It is apprehended that due to “ Corona – Kal lock down “ serious economic crisis will be created, a blast more dangerous than the bomb will affect the economy. India’s GDP will dip from 4% to 0.8% in 2021. Five Sectors of the economy that will be badly hit due to lock down are as under:
(i) MSMEs – Micro Small & medium scale enterprises. They constitute 80% of the Indian enterprises. They are backbone of the Indian economy. They contribute 30% of India’s GDP. They have requested relief package of Rs 20000 Cr. From Government.
(ii) Indian Tourism & Hospitality – It was first to get disrupted but last to see the resumption – KPMG has reported that 3.8 Cr employments will be laid off. This sector will take atleast 2years to be resumed.
(iii) Aviation Sector – It will witness flood of lay off of employment. Workers are forced to unpaid leave. Global Aviation activity has sunk 66%. Aviation sector may loose 5 Lakhs Cr Rs along with 4-5 Cr Jobs.
(iv) Automobile Sector – India has been forced to stop key manufacturing activities. Sh. R.C.Bhargava CEO of Maruti Suzuki stated that Auto Sector is interlinked with many other small scale sectors, when the key sector will be hit then small sector will also be majorly hit.
(v) Real Estate Sector – Housing sector will be hit by 30- 35% Construction activity is stopped. It will loose 7 – 8 Lakh Cr Rs. appx.
Thus pandemic has a wide remification on the economy of developing nation like India. Ministry of Home affairs has issued many advisories, relaxations from time to time but they are still miles away from being normal working of an economy, Covid – 19 has put the whole nation in a troubling state of affairs. Low revenue collection by state, no economic activities, jobs lay-off and retrenchment are showing gloomy state of affairs.
Professionals will also not be spared from the effect of Covid – 19. Therefore we the Professionals have to prepare ourselves. It is better to have umbrella before rain. In order to maintain Social distancing as a major tool for preventing the spread of pandemic, courts have come up with virtual hearing. Working of the Courts through Video Conferencing is a commendable step but it is possible only where the courts have adapted themselves with the changing time. S.C & H.Cs have ample resources to carry virtual functioning but what about district Courts, they are lacking in these facilities, even many of the advocates are not well- equipped with the technology But since the necessity is the mother of invention, the new entrants have to cop-up with the changing situation in order to remain in the profession.
What would be the fate of litigation. It cannot be said that Post Corona – Kal, litigation will come to a grinding halt. But on the contrary, there are chances, that there will be a flurry in litigation. The aftermath of Covid – 19 can not be forecasted as of now but looking at the situation, it appears that advocates may embrace for a number of corporate & contractual or commercial disputes, matrimonial disputes , labour disputes etc.
What would be the fate of taxation practice ? As soon as Income Tax Offices reopened after lock – down, certain IRS officers prepared a report suggesting certain guidelines in tax administration which created panic and tax policy uncertainty. On the contrary now on
8-5-2020 CBDT has issued new interim action plan. After rejecting “ ill – conceived “ suggestions of IRS Officers, CBDT has directed officials not to keep any communication with assesses or issue scrutiny notices without Board’s approval, According to it any such notice would have an “ adverse effect “ on assesses amid the corona virus pandemic. A new system has already been put in
place to make officials accountable for their communication with assesses. Various notifications have been issued by Govt. to ease the Income Tax practice. Re-registration deadline of trust is extended. Tax residency Rules are eased as a relief for NRI, foreign visitors. In any case at ground level, practice would not suffer but there will certainly be an effect on revenue yielding.
There will be a need of organizational restructuring as there will be a sudden fall in revenue generation. it is pertinent to mention that amid this pandemic, the fixed cost need to be paid to associates & staff but recurring cost will have to be adjusted. If it is not adjusted then there will be a shortage in revenue. If such situation continues then at the end of the day, it will lead to laying off of associates and staff working with advocates or Law Firms.
In any case Covid – 19 has acted as boon as well, as it has helped in changing the old mundane way of dispensing justice, introducing Video hearing. A virtual court is a major breakthrough which helped in breaking the monotony. Covid – 19 is a harsh reality but it has impacted the way law education is taught, legal services are given & the justice is rendered. Covid – 19 episode also gives a hope and an opportunity to the junior counsels to embrace the tough times. Seniors shall have to work economically and reap the best of the situation. The budding advocates have to equip themselves with the technology with the legal knowledge & then to grab the opportunities. This is the time of survival of the fittest.
John F. Kennedy once remarked “The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger, the other for opportunity. In a crisis, be aware of the danger – but recognise the opportunity “.
Friends, The risk and the reward are two sides of the coin. We can’t change the circumstances, the seasons or the wind, but we can change ourselves to protect & take benefit. Motivate & rejuvenate yourself with new zeal & vigour. Wiser change is necessary for sustainable growth.
Prem Lata Bansal
Member, Editorial Board