For the last one month, the people of India have been anxiously waiting for a glimpse of the Union Finance Minister, her MoS and also RBI Governor on the idiot box to read out some sort of plan, relief or succour to deal with the extra-ordinary economic situation in India due to the second wave of Corona.
During the first wave of corona pandemic last year and when the country was under lockdown, Union Finance Ministers both senior and junior and also Reserve Bank Governor were frequently on TV channels pompously announcing a slew of relief packages though most of those were either gimmick or unpractical.
Thousands of crores were supposedly put at the disposal of suffering masses, bundled in slick packages. Some of those relief packages announced may prove disastrous in coming years like additional loans to existing borrowers for four years. With a steep fall in trade, MSMEs and manufacturing sectors when even Equated Monthly Instalments (EMIs) of bank loans are not easy to be paid, any decision to grant additional loans may prove to be disastrous in future. Last year, reduction in the TDS rate by 25-percent was simply a gimmick and must not have been included as part of hefty rupees 25 lakh crore corona relief package because it was just a deferment of tax-receipt by the government which was to be paid later either as advance tax or self-assessment tax.
When the ongoing second corona wave is more dangerous and of community-spread; some practical economic reliefs and cautious steps are required to be taken forthwith to overcome the emerging grim situation. Covid is taking its toll in terms of lives and livelihood and has threatened to wipe out the masses as well as huge tracts of our economic landscape but there is no semblance of a much needed financial package required in great urgency for the people and industry, particularly the MSMEs.
An argument may be advanced to justify the conspicuous absence of the Union Finance Minister for making any public announcement as the Centre’s hands were tied owing to the Election Commission guidelines due to elections in five States. But then the leaders from both rulers and opposition had violated EC norms even more brazenly during these elections thus the aforesaid logic does not hold well.
The business health and sense never returned to normal even in the intervening period of two Corona cousins. Thousands of shops closed, mid-size businesses with shutters down; mobile vendors, small companies, small and cottage units, daily skilled and semi-skilled labour etc are now struggling to live up to just sustenance level. These are the ones and the several cross-sections of MSMEs who are already bearing the brunt of the corona and resultant suffocation in the funds-starved economy.
This time, the Finance Minister should not do the usual financial rope tricks. People want real schemes and not the spin of a scheming regime. A six-month moratorium on bank interest and EMI without interest is the first step to be taken.
The concept of loans being provided by Non-Banking-Financial Companies (NBFCs) minting money through unchecked interest rates on financing done by public-sector banks should altogether be banned. Banks may be allowed to use courts for loan recovery only through civil suits rather than torturing SARFAESI Act or Negotiable Instrument Act. Banks must not be allowed to hire recovery agencies where goons are employed for the recovery of loans.
All recovery proceedings initiated after the second wave of corona when reached its peak in March 2021 should be suspended until at least one year after returning to normalcy or say December 2022. In no case, borrowers and their families may be made roofless through recovery proceedings on self-occupied residential properties for at least two years. No window dressing or Book Entries this time please!
