The COVID-19 finance package announced by the Reserve Bank of India (RBI) on Friday is too inadequate to manage the fiscal crisis as it will fetches only ₹729 crore for the State, Finance Minister T.M. Thomas Isaac has said.
Dr. Isaac said the package norms lack clarity and the only option left before the Centre to salvage the crisis was to raise the annual borrowing limit for States from the current 3% to 5%.
The announcement that States could avail themselves of loans up to 60% of the ways and means would fetch the State only ₹1,215 crore, but would have to repay it in 21 days.
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The Centre did not seem to be aware of the gravity of the current crisis. The RBI should direct banks to sanction additional loans to small and medium traders and such others who were forced to bear the brunt of the crisis. The micro, small and medium enterprises as well as the traditional industries such as coir and cashew needed support for reviving operations. Their loans should be restructured, he said.
The Centre should announce waiver of farm loans, extend the moratorium on all loans for a year and also waive the interest during the period. Similar to the sops announced for corporates, the Centre should adopt a liberal approach in the case of other sectors too, he said.
Dr. Isaac welcomed the packages announced by NBFC, National Housing Bank, SIDBI, and NABARD.
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