Missing the Target
India Legal|May 24, 2021
The recent resuscitation move by the Reserve Bank of India may not be enough to help small businesses stay afloat. A petition filed in the Supreme Court wants a fresh moratorium on interest on bank loans
Sujit Bhar

THE second wave of the pandemic has destroyed more lives than the first wave even infected, and despite no national lockdown having been announced (yet), the entire industrial and commercial ecosphere is quickly collapsing into itself. The problem with small business owners has been almost doubled from the desperate situation they were in during the first Covid-19 wave. As the first wave seemingly ebbed, businesses started opening. Those who had lost heavily took massive risks and invested more into their businesses, hoping for some recovery from past pains. They had no warning of the second wave, and now interest on new loans are compounding beyond their means. They are sinking, yet again. It’s déjà vu.

Actually, it is more than that. During the last wave, the government at least made an effort to announce financial incentives and courts—specifically the Supreme Court which bunched a plethora of appeals—heard many applications, finally managing to work out a formula on how outstanding dues were to be handled and how compounding interests were to be put on hold. There was a generally agreed moratorium. As the second wave hit with immense ferocity, the entire administrative system of the country virtually collapsed. The government and even the courts have been busy just helping people survive, arranging for vaccines, medicines, hospital beds and even oxygen. The situation has gone so bad that neither the relevant ministries of the government nor the Reserve Bank of India (RBI) has been able to come up with any viable financial module, or even an announcement that can ameliorate the intense financial pains of the public.

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