Letters to the Editor dated May 19, 2020

Since 1991, banks in India have been following international accounting standards, income recognition and capital adequacy norms. To strengthen their hands in recovering overdue loans, measures such as SARFAESI Act, 2002 and the Insolvency and Bankruptcy Code (IBC) were introduced subsequently, with good results. The government has now imposed a ‘Blanket one-year ban on fresh insolvency proceedings to be launched by banks, under IBC’ (May 18), which is unexceptional, given the crisis situation faced by corporates, especially the MSMEs, thanks to the Covid-19 pandemic.

However, the government’s response needs to be comprehensive. Banks need to be simultaneously exempted from making provisions on the advances slipping into NPAs.

Also, once the situation returns to normal, efforts should be taken to revert to status quo, so that the discipline painstakingly inculcated over the years, especially among the big borrowers, is not frittered away. Expediency cannot become a permanent feature.

Chennai

This has reference to ‘Underwhelming effort’ (May 19). The stimulus package may have disappointed many as it does not give more cash directly in the hands of people. But cash disbursement will only tantamount to doles and the money disbursed will only be used for unproductive purposes, if the past is any indication.

It is appropriate to facilitate income generation through various measures with a long-term view. The outlay planned for MGNREGA is substantial if only the migrants and those in the unorganised sector avail themselves of the scheme. The cost of insurance to cover up to three months’ loss of income for migrants and unorganised labour could have been covered in the package.

Mumbai

With States now being given enough leeway and authority in setting boundaries of the infection zones as the country entered the fourth phase of its lockdown, they (States) have more onus now to ensure that the Covid-19 pandemic does not spiral out of control. Besides, they need to address the economic and humanitarian imperatives with a seriousness it truly deserves. While there is no let- up in the spurt in Covid-19 positive cases in urban hotspots such as Chennai and Mumbai, one should not be oblivious to the positive trend on the other end of the spectrum, manifested itself in improvement in the doubling rate of coronovirus infection and in the recovery rate over the days.

Sholavandan, TN

Covid-19 has affected literally every sector, especially those which are labour oriented and coffee is one among them. The mega fiscal package has deserted coffee growers, who are facing unprecedented hardships with the exodus of migrant labour, drop in prices, and the supplementary crop pepper not turning out to be financially viable.

This sector, a major forex earner, was expecting at least interest waiver and loan restructuring. It is not too late for the Finance Minister to come out with a supplementary package for the sector and ensure its survival.

Halekere Village, Karnataka

Former US President Barack Obama described incumbent President Donald Trump’s mishandling of the Covid-19 pandemic as an “absolute chaotic disaster” and added that “US officials were not even pretending to be in charge”. One couldn’t agree with him more.

From the very beginning, Trump was dismissive of the coronavirus outbreak. He shunned wearing face-mask, a shield; he was sceptical about social distancing; he incited his supporters to hit the streets to protest lockdowns. Contrary to medical caution, he was desperate to reopen the economy. He was not deterred by the certainty of more suffering and casualties. Even when there was a spike in cases he claimed that US succeeded in flattening the curves.

Maruthancode, TN

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