Among the policies needing to be adopted is an extension of the moratorium by two more years.



Old habits may die hard, but perish they do in most places. In India they seem to linger on and on. Whether it be the Police Code or the Criminal Code, what was designed by a colonial government more than a hundred years ago seems to be accepted as perfectly suited to the India of the 21st century. The reason for such fealty towards a construct that from the start was destructive of individual freedom and endeavour resides in the fact that the greater the discretionary powers, the more the bribe that can be squeezed out of citizens by corrupt officials. The grant of discretion goes on and on. In the New Education Policy, which overall is an immense improvement over the past, it needs to be kept in mind when detailing the new policy that the automatic route should be the rule and the discretionary roadblock the exception. If the certifying official is not among the majority of officials who are honest and conscientious, what some discretionary provisions do is to give that individual an opportunity to try and extract “good will” from an institution every now and then. If any institution is seen as indulging in unwholesome activities, a warning could be given to them to change course and such warnings repeated once again within a reasonable time frame. If they do not change course even after this, either a penalty should be levied or in some cases, certification could be withdrawn, the entire process being made transparent from the start. India has been given a bad name because many times a new government in a state scraps the projects of the previous regime, the way Chief Minister Jagan Mohan Reddy astonished Singapore by walking away from the Amravati State Capital Project that had been agreed upon by authorities in that country and the Andhra Pradesh government under Chandrababu Naidu. Certainly, wrongdoing deserves to be punished, and courts are right to insist on this, for example in telecom. But instead of taking away the licences of all but a handful of operators as a consequence of the 2G case, what may have been more desirable would have been to levy financial penalties on the wrongdoers while allowing them to continue in business. Telecom in India has been drained of competition, and the effect on services is evident. Browsing speeds are slower than those elsewhere in South Asia, while hundreds of millions of citizens still do not have access to the internet, something that ought to be the fundamental right of every citizen.

In India we have seen a forex saving copper company being shut down, thereby resulting in a bulge in imports of that metal. Or the closure of a giant mobile telephone handset manufactory,  resulting in job losses and foreign exchange outgo. Interestingly, the country whose exports to India have gained exponentially from various obstacles to domestic output is China. Several business houses have specialised in substituting domestic products from other manufacturers with imports from China, and this often with money borrowed from public sector banks. Such business houses seem to be happy in their role of facilitators of foreign companies looking to hollow out domestic companies. Instead, such Indian businesses need to make money abroad through exports rather than spend borrowed money abroad on imports. Or in the matter of charity, if every dollar of grant to foreign universities that are given by citizens of India is matched by their setting up of world class universities in India, such largesse to foreign institutions already bursting with cash could be excused as a gesture to a university where presumably the sons and daughters of families and friends study. That the colonial mindset is still prevalent in India is clear from the cavalier manner in which a few enterprises have scooped up huge loans from public sector banks and used the money to generate jobs abroad rather than in India, where they are most needed. Neither the RBI nor North Block seems to have any problem with this. What they seem to oppose are suggestions that the moneys going to public sector banks from the exchequer to improve their balance sheets be used to waive the interest during the lockdown of MSME and those stressed citizens with housing and vehicle loans. It would be easy to check on the manner in which the income of a borrower has been affected by the novel coronavirus. In case income has been severely affected (say by a minimum of a 30% cut from pre-pandemic days), the outstanding interest on the home or vehicle loan of that individual should be written off through the moneys received by the banks from the exchequer. Otherwise, once the moratorium is over, such individuals would face default. Barack Obama disgraced himself as President of the United States by allowing in 2009 and subsequently, delinquent financial institutions to gobble up huge cash transfers from the exchequer while standing by as millions of homeowners were made homeless through foreclosures. Why the RBI and North Block are against an extension of the moratorium (by two years, given the damage to the economy that Covid-19 has caused) and writing off the interest payable by stressed borrowers is explainable only by their consistent record of favouring external funds over needy citizens, and their policy of steadily lowering the value of the rupee.

Prime Minister Narendra Modi is making strides in simplifying procedures during his second term. Among the policies needing to be adopted is an extension of the moratorium by two more years, and taking care of the interest cost of the home and vehicle loans of stressed borrowers during the period of the moratorium or in the interregnum, till such borrowers return to financial health (i.e., recover at least 70% of their pre-pandemic income). Such a move would not just make economic but ethical sense. Helping needy citizens, even if they are part of the urban middle class, is good policy.