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For nine days, many Indians celebrated with worship, deep devotion and love for Ma Saraswati, Ma Lakshmi, Ma Kali, with citation of Durga Saptshati who had killed evil minded persons and destroyed evil thoughts. They celebrated the incarnation of Lord Rama (Ram Navami) who had killed mighty Ravana. Lord Rama is the all-pervading Brahma (God). He is the supreme bliss personified, the highest lord. He is without beginning or end. He is qualified and the unqualified Brahma. He is the truth, consciousness and bliss combined. He is the manifestation of all creation – animate and inanimate. Lord Rama is beyond the grasp of intellect, mind or speech. When virtues decline, Lord Vishnu incarnates as human being.

Covid-19 pandemic: World is at great peril. The health and lives of humans and economy are under serious threat due to the pandemic Covid-19. According to the latest UN Trade report, the world economy will go into recession this year with losses of trillions of dollars. It will shrink by almost 1% in 2020, a reverse from a positive growth of 2.5% forecast. The UN is calling for a USD 2.5 trillion rescue packages for developing countries in which about 2.20 billion people live. The IMF’s Managing Director Kristalina Georgieva has offered a ‘war chest’ of USD 1 trillion to help meet the financial needs.

India is affected by this dangerous pandemic too. Human lives need to be saved. The economy on which depend lives and livelihoods needs to be saved. This requires visionary leadership, those who act fully mindful of the far-reaching consequences of their actions and decisively do what needs to be done.

The Prime Minister Narendra Modi has announced certain stringent measures to combat Covid-19 in respect of health. Finance Minister Nirmala Sitharaman and the RBI governor Shaktikanta Das have given some financial relief, stimulus to the economy. There have to be more ammunition, which give practical results and boost the economy. Apart from the measures to infuse an additional Rs. 3.74 trillion into the system, the RBI has also made the Reverse Repo rate as the operational rate. The commercial banks would now have the additional liquidity for investment in corporate bonds and non-convertible debentures (NCDs), which are only grade corporate bonds. As a result, a few large corporates will be eligible.
The cost of Covid-19 lockdown is pegged at around USD 120 billion (around Rs 9 lakh crore) or 4% of the GDP. Lockdown is costing Indian economy USD 4.64 billion per day.

Forty five million migrant workers are out of work. This will certainly cause the number of bankruptcies and closure to rise, especially in the MSME sector. Investment in infrastructure will further be affected. Due to slowdown of infrastructure and real estate, demand for steel and cement will fall drastically, badly hitting these sectors. Prices of stocks have fallen steeply.
India’s foreign trade, both exports and imports, have been severely affected.
Service sectors like aviation, hotels, restaurants, tourism, retail, railways, transport have been affected directly. More than 15 lakh persons will be rendered unemployed.

MSMEs: Government help sought – (i) Soft loan for payment of salaries, statutory dues, pressing creditors, permission for few people to go to office to meet financial commitment while maintaining distance at work.
(ii) Government need to pay ESI/PF up to Rs. 21000 for six months for units employing 300 to 400 workers as these units are labour-intensive, instead of government’s restriction up to 100/drawing salary/wages of Rs 15000 per month for 3 months.

NBFCs & Industry/Service sector: The RBI’s announcement for moratorium for loan repayment is not mandatory but discretionary, while NBFCs are required to give three months moratorium to their borrowers. It has to be kept in mind that NBFCs are financial intermediaries who borrow money (from banks, Mutual Funds, and via money market instruments) and then on-lend to their customers. If NBFCs are to provide moratorium to their customers, that will necessarily impact their ability to service their lenders. This has been endorsed by CRISIL in their research. Therefore, to ensure that NBFCs are able to avail such moratorium from their lenders, necessary notifications should be issued from all financial regulators namely RBI, SEBI and IRDAI at the earliest. This will help the NBFCs to pass on the benefits of moratorium to their MSME customers who need it the most at this stage.

Action Plan for government: In view of buffer stocks of food grain, both rice and wheat, and ensuing bumper crops, sale/issue prices are to be reduced by 15-20% so that the poor can buy as their purchasing power has been hard hit due to lockdown and grains will be saved from being damaged and eaten by rats. It will save huge storage costs for FCI/central agencies/state agencies. Give all commodities, fertilisers at cheaper prices abundantly. Abundance supply will curb hoarding.

Seized with panic and being rendered unemployed, unorganised migrants lacking habitats and not in a position to pay rents have rushed to native villages in crowds of thousands ignoring all necessary health precautions, and without food, walking on foot for hundreds of kilometres along with children and women. They have been held at the borders of each state. This has happened because of sheer lack of vision of leaders, bureaucrats and all concerned. This movement could have been organised by running usual trains and buses by following strict adherence to safety norms in terms of social distancing and hygiene. These migrant workers do not have habitation facilities, i.e. home-space for all family members.

It is necessary for the government to organise the return of the work force to their place of work including agriculture where harvest is ready and getting wasted. Proper amenities should be arranged. The workers must survive. At homestead, they do not have any earning. What to do? Farmer’s suicide and hunger deaths have been there. As rightly advised by the Centre, all state governments must now allow bulk buyers, big retailers to buy directly from farmers and cooperatives to ensure that the bumper harvest is not wasted.

The central government along with state governments must put on hold all expenditure on unnecessary beautification of their urban infrastructure for the time being. Existing buildings for public affairs are well and accommodative. Glamorous buildings and extravaganza expenses need to be stopped and fund should be used for productive works, which can continue to generate wealth.

The RBI and the government should stop the cleaning process of bank balance sheets, which has damaged the economy of the country greatly. It has killed the spirit of investors/ promoters/ bankers. Japan conducted $ 4.8 billion of repo operations to ensure enough liquidity. China has provided $115 billion or 0.8% of GDP in credit to banks to provide loans to badly hit companies. South Korea will give cash to small firms struggling to pay wages. South Korea has dealt with Covid-19 with well organised health care system. Singapore government is giving cash grants to employers with affected workers.

To boost the economy, it is crucial to allow all lending institutions and banks to go for one-time structuring of a loan with simple interest rates of 8% with a moratorium of minimum of one-year, extending to two years. This will revive production with continuity of employment and survival of all the sectors of business. Many countries have done this. With additional liquidity at their disposal, banks can invest in commercial papers of corporate to augment these incentives.
For all loans which have got impaired and or will get impaired in the next 90 days post-lockdown, the government / RBI / regulators should relax the norms and allow a two-year window where the lenders can consult borrowers to re-work the terms of loan based on future cash-flows and underlying value of assets and collateral. During the restructuring phase, the account should be classified as ‘Standard’.

Central government/state governments/PSUs/government agencies must clear all outstanding payments to contractors/bankers/suppliers. Arbitrators should give the award, even treasury, within a fortnight to make payments by those authorities. It is found to save their skin, officials refer the outstanding payments to arbitration and sometimes, several cases are dragged to high courts and supreme courts. Government should honour the arbitration awards instead of further litigation so that business and industry will have enough liquidity to continue operations. Time and lot of limited funds are wasted.

MSMEs and the entrepreneurial class have been suffering a lot from this crisis and have also suffered in the last few years due to demonetisation and implementation of Goods & Services Tax (GST). NBFCs are the principal source of credit for MSMEs. To keep the MSME sector healthy, it is imperative to ensure that the NBFCs remain healthy, too.

To combat Covid-19 all sectors should be opened in limited way maintaining social distancing and other health and hygiene instructions.

Greenfield hospital/healthcare projects, which have got delayed due to long-drawn process of getting clearances and approvals and are gasping for funds due to overrun of cost and interest, should be given funds at affordable rates and with moratorium of five years to match their gestation period.

May Bharatwasis have the wisdom to take visionary actions. They must consider the consequences of their actions so that these save lives from Covid-19 and from hunger, the pangs of poverty. They must also save national wealth from being wasted and instead, generate wealth for 1.33 billion populations so that they live with human security and dignity. Let our national assets not be taken over by global sovereign funds and multinational companies.