Govt working on fresh relief measures to fight Covid-19 second wave

The government may come up with new financial relief measures as the Covid-19 pandemic’s second wave puts stress on the repayment of industrial and personal loans and cases of defaults rise.

Separately, the Reserve Bank of India, which had earlier this month asked banks to allow a second moratorium on personal and small business loan, may also extend bad loan classification period to 180 days from the current 90 days.

“The government and the RBI are regularly monitoring the situation and asset quality data. Additionally, the government is also in talks with business bodies and economists. Financial relief measures in terms of extension in repayment of loans, taxes are on the table,” a source told DH.

The government has also got feedback on informal sector and self-employed getting hit once again due to the second wave of the pandemic. A lot of jobs have been lost. The work is on on the ameliorative measures, the source said.

Sectors across the economy have sought help from the government and the RBI to tide them over the crisis, which has hit them the second time.

The hotel industry says it has taken a hit of over Rs 1.30 lakh crore in revenue for the fiscal year 2020-21 due to the impact of the pandemic. They have urged Prime Minister Narendra Modi for immediate support from the government to save the hospitality sector from imminent collapse.

Automotive dealers have sought fiscal support, including an extension of GST payment for the next three months, to survive the crisis.

The apex transporters’ body too has requested the government for a blanket loan moratorium for the sector till August 31 to help them survive when nearly 70% of the country is under lockdown.

The RBI had earlier this month come out with extension of loan moratorium in certain personal and business segments for up to two years. Many small businesses said the need of the hour was more flexibility in handing out loans.

The Federation of Indian Micro, Small and Medium Enterprises had also written to the finance ministry saying that more than the requirement of additional funds, the greatest need for MSMEs is flexibility in assigning NPAs.

Sources in the banking industry said the central bank may also look at the proposal by banks to increase the time period for recognising a non-performing asset to 180 days from the existing 90 days.