Economic activity suffered significantly when the virus first disrupted factories in China and worsened after it spread to several countries. India also faces a tough economic challenge as the government ordered a 21-day blockade to prevent the virus from spreading.
The decline in business has already led to layoffs and employers asking their staff to go on vacation without pay.
Some employers have asked staff to take pay cuts due to the situation. As a result, many people have petitioned the government to temporarily end EMI and loan repayments as part of their financial aid package.
There are many citizens in Twitter who have pleaded with the government to suspend EMI and loan repayments until there is clarity on the situation.
A March 24 report on the Deccan Chronicle said car and taxi drivers have asked the government to issue a moratorium on interest payable on vehicle loans.
Like Ola and Uber, the top two app-based taxi services in India have been suspended due to the crash, many drivers are likely to default on EMI payments and loans.
A few days ago, India Today TV spoke to a marketing executive in New Delhi, who said he was asked to continue. unpaid leave.
In addition, the Executive President of the Indian Retail Association (RAI), Kumar Rajagopalan, told Reuters that around 40 percent of people working in the retail sector could lose their jobs due to the national blockade.
Leaders have also begun to take note of the situation. BJP leader Kirit Somaiya recently shared a letter he wrote to RBI on the matter.
He asked RBI Governor Shaktikanta Das to declare a three-month moratorium on EMI and monthly fees.
Order @RBI Governor @DasShaktikanta declare a 3-month moratorium on monthly EMI fees / reimbursement by individuals / entrepreneurs / small merchants / retail borrowers as their affected earnings due to the Corona Crisis Lockdown curfew across the country @ BJP4Maharashtra @ BJP4India pic.twitter.com/3mcXhWTIHf
Kirit Somaiya (@KiritSomaiya) March 24, 2020
An Economic Times report suggested that even the Finance Ministry has written to the RBI on the matter.
Department of Financial Services secretary Debashish Panda wrote to RBI suggesting a moratorium of a few months on the repayment of EMI and loans, according to people quoted in the report.
Chances are high that companies and individuals will not be able to repay existing loans during the period due to increased layoffs and pay cuts.
It would be interesting to see if the government considers the suggestion as part of its broader economic package to be launched in the coming days.
A Reuters report suggests that the government could announce a rescue package of Rs 1.5 lakh crore or $ 19.6 billion, but the final plan has yet to be sealed. Another source quoted in the report said the stimulus package could be as large as Rs 2.3 trillion or Rs 2.3 lakh crore.
The stimulus package will go a long way in helping the poorest rural population, including direct account transfers to needy families. It is not yet known whether the government will order a break in EMI and monthly loan payments.
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