Due to the Covid-19 and subsequent lockdowns across the country, the Reserve Bank of India (RBI) allowed banks and other lending institutions a three-month loan moratorium on EMIs from March to May 2020. This was later extended by an additional three months up to August 31, 2020.
The moratorium certainly helped borrowers, be they homebuyers or real estate developers, reeling under monetary pressure brought on by the pandemic. Additionally, RBI also maintained that banks should not term late payment as defaults. However, the banking regulator left it to the discretion of lenders to decide on whether to grant or withhold the moratorium, and for how long, depending on individual borrower profiles.
Reportedly, the RBI is again mulling the possibility of extending this moratorium period. Whether it does so or not, borrowers must consider the pros and cons of availing of this facility if it is approved. Should they further defer their EMIs or stretch themselves and continue servicing their loans as per schedule?
No blanket advice can be given for this dilemma – as always, the devil lies in the detail. It is important to remember that this is no ‹free lunch› and that there is fine print to consider. To some homebuyers, the loan moratorium is a temporary respite and provides additional time to sort out their finances. To others, it adds to the monthly financial burden since the EMI amount would increase once the benefit period is over.
Benefits of the loan moratorium
Several borrowers, including developers, have already availed of the benefit of EMI moratorium for six months, with the possibility of a further extension. For developers, a one-time loan restructuring could have been a better option, but a further extension of the loan moratorium would certainly be welcome.
Previously, the RBI had also converted the accumulated interest for the moratorium period into a term loan. This means that the borrower would not have to immediately repay the accumulated interest on the loan once the moratorium ends.
For developers – it gives them more time to sort out their finances. Residential sales across cities are gradually reviving with the lockdown being lifted. With the festive season approaching, housing sales activity is likely to gather momentum. Therefore, an extension will give developers the time to collect funds via sales and later service their loans via these funds once the moratorium period ends. The fact that non-payment of EMIs will not result in falling into banks’ bad books is an added relief.
For individual borrowers – it will help both salaried and self-employed borrowers facing difficulties with servicing their car, home and personal loans due to the unique exigencies of the pandemic. It is an opportunity to regain financial clarity. Individual borrowers are also safe from unfavourable action by banks due to non-payment of EMIs, which would otherwise adversely impact their credit score. The RBI has ensured that availing of this moratorium will not be considered a default for the said period.
A word of caution for home loan borrowers
Over the past couple of months, some banks have reset their MCLR rates for borrowers who have availed the moratorium benefits. As a result, many borrowers are now receiving notifications regarding the resetting of their loan tenure, which has been reduced by a few months depending on the amount borrowed.
Their monthly EMI amount will eventually increase with the lowering/ resetting of the loan tenure once the loan moratorium period is over. This can significantly upset financial planning in future. Since many individuals lost their jobs or took pay cuts due to COVID-19, they may find it even more difficult to repay these increased EMIs.
Increased EMIs may lead to defaults by some existing home loan borrowers, especially those in a job crisis or other business uncertainties.
Also, while the sixmonth moratorium did provide relief in a time of uncertainty, home loan borrowers will now need to tread with greater caution if the RBI extends the moratorium.
Borrowers who want to consider restructuring their loans with their respective banks will need to check the fine print.
It is important to establish the exact amount of their monthly EMIs once the moratorium period ends. They must also consider the possibility that the uncertainty continues, and that they may be unable to service their loans once the extension period expires.
Shobhit Agarwal is MD & CEO, ANAROCK Capital.
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Fake news and the legal angle
Fake news” is the catch phrase of the day! Fake news is a genus of “yellow” or “synthetic” journalism that encapsulates deliberate disinformation or hoaxes spread via conventional print and broadcast news media or online social media. In February, 2018, the BBC defined fake news as “false information distributed deliberately, usually for political or commercial purposes”. Fake news, although a term of fairly recent origin, has prevailed since time immemorial. In the 13th century BC, the mighty Egyptian Pharaoh Ramesses II, popularly known as “Ramesses the Great” consciously spread fake news portraying the Battle of Kadesh, the earliest pitched battle fought in human history in 1274 BC, as a decisive victory for the Egyptians against the Hittites of Anatolia (modern day Turkey) in the city of Kadesh, a bustling trading centre in the ancient world. And on 26th March, 1475, Easter Sunday, a Franciscan preacher, Bernardino da Feltre, gave a series of sermons in Trent, Italy, claiming that the Jewish community had murdered a two-and-a-half-year-old Christian infant named Simonin and had drained his blood and consumed it to celebrate Passover, a major Jewish holiday that commemorates the exodus of the Israelites from slavery in Egypt. The fake news spread like wild fire and the Prince-Bishop of Trent Johannes IV Hinderbach ordered the city’s entire Jewish population to be forthwith arrested and tortured. Lamentably, fifteen of them were pronounced guilty and mercilessly burned at the stake! Pope Sixtus IV (who patronised the construction of the Sistine Chapel and the creation of the Vatican Apostolic Library!), made a heroic but abortive effort to stamp out the news which had spiralled out of control. The popular fervency boosting these anti-semitic “blood libel” legends made it nigh impossible for the papacy to take any punitive action against Hinderbach, who eventually went on to defiantly canonize “Little Martyr Simon” as a Saint, crediting him with a hundred miracles. The Nazis scrupulously resurrected the fake news set afloat in Trent as a malicious “Goebbelsian” propaganda weapon against the Jews in the spine chilling Holocaust.
Fake news in India has had a deleterious effect on our nation’s unity and integrity leading to multiple episodes of violence between castes and religions and has interfered with robust public policies. It has often spread through the smartphone instant messenger WhatsApp, having presently 487 million monthly active users in the country. The Supreme Court of India has taken a very grave view of the indiscriminate spread of fake news. On 17th July, 2018, a panel headed by the former Chief Justice of India Dipak Misra recommended that Parliament pass a new “special law” that would instil fear in would-be attackers and demanded that the police take immediate steps to investigate and curb the dissemination of “irresponsible and explosive” messages and videos that could incite mob violence and lynchings. On 14th November,2019, the Supreme Court summarily rejected a batch of review petitions in the contentious Rafale fighter jets matter. What has now most regrettably come to light is that the wholly unwarranted stand of the opposition led by the Indian National Congress Party under the stewardship of its then President Rahul Gandhi (who is presently spearheading a highly publicised nationwide political marathon!), was singularly influenced by deviously contrived fake news (presumably not of Gandhi’s own making!) calculated to disparage the Prime Minister of India and his Government. Such fake news not only induced Gandhi to make the highly defamatory remark “Chowkidar Chor Hai” but perfidiously ascribe such remark to the Supreme Court. Significantly, on 8th May, 2019, Gandhi gracefully tendered an unconditional apology to the Supreme Court for wrongfully attributing the offending phrase to the court and the court took specific note of his apology whilst dropping the contempt proceedings against him in the Rafale case on 14th November, 2019. The Supreme Court on 2nd September,2021, expressed grave concern over the proliferation of fake news in the absence of a regulatory mechanism and asked the Centre if it was “really serious” about fixing accountability on web portals and other media to check the menace.
In a recent study published in the peer-reviewed academic journal American Behavioral Scientist, researchers from the Pennsylvania State University in the US, including Professor S.Shyam Sundar, have identified seven types of fake news, an advance that could help better spot misinformation, and create technology that can automatically detect misleading content. They have narrowed down myriad examples of fake news to seven basic categories, namely false news, polarised content, satire, misreporting, commentary, persuasive information and citizen journalism.
The Government has taken a serious note of rising incidences of fake news on social media and digital platforms and has decided to set up a fact-checking module under the Ministry of Information & Broadcasting to identify such areas and take corrective action. The government’s FACT Check module is tasked to work on 4 principles of find, assess, create and target which will involve round the clock monitoring of online news sources and social media posts.
The social media platforms cannot remain innocent bystanders to the spread of “irresponsible and explosive messages” or evade their responsibilities. The focus must not just be on messaging platforms but also on search engines like Google. Intermediaries and search engines should do much more and publish what they are doing to counter the irrepressible spread of fake news. On 16th July, 2022, the Union Information & Broadcasting Minister Anurag Thakur urged the Government’s communicators to be agile and adaptable to take up challenges such as fake news. And on 26th September, 2022, Thakur revealed that the Government had blocked 45 videos and 10 YouTube channels for airing fake news with intent to spread religious hatred. The Minister asserted that these channels were working against the interest of the country by spreading fake news to spoil India’s relationship with friendly nations.
As our economy and lives digitise increasingly, there is an imperative need for greater understanding of the do’s and don’ts and the laws governing the conduct of participants. This needs to be carried out by the apps and platforms in conjunction with the Government to usher in a “realistic world”. Platforms and intermediaries need to comply with data access demands legally made by our security agencies. Our law enforcement agencies need to detect and prosecute spam farms and those who are responsible for spreading content that foments crimes and hatred. The cyberspace is replete with criminals and lawbreakers. To make matters worse, bots without human supervision are capable of effortlessly spreading fake news to millions of people around the world. Our enforcement of laws needs to become more tenacious and the prosecution of even a few offenders would send a stern message of deterrence to others. Technology is meant for the public good. But then technology is a double-edged sword and the celebrated Norwegian historian and political scientist Christian Lous Lange aptly observed, “Technology is a useful servant but a dangerous master.” So when technology is used with the intention to harm, the Government and intermediaries must close ranks and act unitedly to ensure that our country, our democracy and our way of life do not fall a hapless prey to pernicious ill winds that blow no good.
BRIEF NOTE ON THE AUTHOR
The author is an internationally reputed senior lawyer practising in the Supreme Court of India and various High Courts and Tribunals in India. He has been closely associated with some of the topmost Indian corporates like Tata Sons Ltd., Tata Consultancy Services Lt., Tata Steel Ltd., Reliance Industries Ltd., ITC Ltd., ICI India Ltd. and Hindustan Unilever Ltd. as a lawyer and advisor. He addressed a select gathering of MPs and other eminent persons in the House of Lords in February,2009 and was awarded the prestigious “Ambassador of Peace Award”. In April,2009, he was also invited to the House of Commons. He was also invited by Chatham House and by the Universal Peace Federation in London several times. He is an avid debater, public speaker, writer, broadcaster, telecaster, artist, painter, sculptor, music critic and filmmaker. He is also an indefatigable lover of western classical music and has one of the largest private collections of western classical music in India.
Quality will define brand India in the time to come: Piyush Goyal
Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Piyush Goyal today asked the Quality Council of India (QCI) to strive to bring about convergence of all the various quality and standards organizations in the country so that they may work in tandem towards building a world-class quality system in India and make quality a national mission. He was addressing the gathering at the Silver Jubilee Celebration of QCI in New Delhi today. With the motto ‘Gunnwatta se Atmanirbharta’, the event commemorated the efforts made by QCI in its pursuit of delivering quality of services, products, and lives.
“Convergence will also help us scale up absorption of quality standards, help us take the national quality mission to every citizen and every business in the country so that the business environment, the investment environment that we have been able to create in the country can grow from strength to strength and help India become a developed nation by 2047”, Goyal said. He also urged QCI to help align India with international quality standards.
Other dignitaries in attendance at the event included Shri Amitabh Kant, India’s Sherpa to the G20, Shri Anurag Jain, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), Shri Anil Agrawal, Additional Secretary, DPIIT, Adil Zainulbhai, Chairperson, QCI and Capacity Building Commission and Secretary General of QCI, Dr. Ravi P. Singh.
Goyal emphasized that quality will define brand India in the time to come. He observed that quality never comes at a cost but saved costs and improved productivity. He urged the citizens of the nation to imbibe the determination to do everything they do in a better, more efficient, more cost effective, more useful and more measurable manner. “The culture of quality has to be ingrained in the nation if it is to become a developed country by 2047. This idea of quality can truly transform this country faster than anything else”, the Minister added.
The Minister spoke of the Panch Pran articulated by Prime Minister Shri Narendra Modi as India celebrated 75 years of independence and said that PM Modi wanted India to change its mindset, remove the historical baggage of colonialism, become more confident, more self-reliant and bolder in our ambitions to plan for India being a developed nation by 2047.
The Minister said that PM wanted India to be proud of its history, culture, heritage and traditions which held a lot of lessons capable of helping India progress as a society. He said that we must be very proud of the thread of unity that binds us amidst great diversity. He asked that we perform our duties towards fellow citizens and the nation with ‘kartavya bhavna’. The Minister highlighted that commitment to quality was a virtue that would transcend every single one of the Panch Pran, a virtue that would help us achieve all the five vows faster and smarter.
He applauded QCI for bringing quality consciousness into the entire coal ecosystem and said that this initiative of QCI has been in the spirit of national service because it transformed the way coal industry perceived quality. He opined that prior to 2014, there was significant gap in the price paid and the quality of coal received due to lack of adherence to quality standards. He noted that once QCI stepped in and started undertaking initiatives like third party sampling of coal, there was transformative improvement in quality in the sector.
Goyal noted that Food Corporation of India’s (FCI) commitment to quality had resulted in better quality food grains reaching consumers who were mostly underprivileged. Shri Goyal also highlighted that the process of distribution of these food grains was now completely technology enabled using biometrics and said that under One Nation One Ration Card (ONORC), beneficiaries could pick up their food from anywhere in the nation. “The entitlement is transparent, the delivery is transparent and all of this happens through a quality-assured process”, Shri Goyal said.
The Minister also applauded the role played by QCI in the One District One Product (ODOP) initiative to encourage products from remote areas to find markets in India and abroad. He said that QCI was helping the Commerce Ministry introduce the concept of quality in remote parts of the country so that products from these areas also become acceptable in Indian and international markets. He added that QCI had also contributed significantly in the GI tagging initiative and in completing the Swacch Surveykshan. Shri Goyal also appreciated the QCI for helping bring quality consciousness at storage points in various warehouses of FCI, the Central Warehousing Corporation (CWC) and different states.
Goyal pointed out that QCI had played a leadership role in the initiative of the Open Network for Digital Commerce (ONDC).
PM addresses IAS officers of 2020 batch in the concluding session of Assistant Secretary Programme, 2022
Prime Minister Narendra Modi addressed the IAS officers of the 2020 batch in the concluding session of the Assistant Secretary Programme, 2022 at Sushma Swaraj Bhawan in New Delhi earlier today.
Speaking on the occasion, Prime Minister said that the officers have got the opportunity to serve the country during the Amrit Kaal and help realise the Panch Pran. He said that Officers have a key role in ensuring that the target of a developed India is achieved in Amrit Kaal. He highlighted the significance of out-of-box thinking and adopting a holistic approach in their endeavours. He cited the example of PM GatiShakti Master Plan for showcasing the significance of such a holistic approach.
Prime Minister discussed the importance of innovation and how it has become a collective effort and part of work culture in the country. He talked about the Start-up India scheme and how the number of startups in the country has witnessed a significant jump in the last few years. He noted that this has been made possible due to several Ministries coming together and working as a team through a ‘whole of government’ approach.
Prime Minister mentioned how the focus of the governance has shifted outside Delhi, to all regions of the country. He gave examples of how important schemes are now being started from places outside Delhi. Prime Minister suggested the officers develop an understanding of the local culture of the area of work and strengthen their connection with local people at the ground level. He asked them to focus on One District One Product and explore the opportunities of exporting products of their district. He also asked the officers to prepare their action plan for the Aspirational Districts Program. Speaking about MGNREGA, Prime Minister spoke about implementing the scheme in a more effective manner. He also underlined about the significance of Jan Bhagidari spirit and said that this approach can play a key role in tackling malnutrition.
Highlighting the success of Jan Dhan Yojana earlier, Prime Minister talked about the importance of digital economy and exhorted the officers to try to connect people across villages with digital economy and UPI. Further, underscoring the importance of service to the nation, Prime Minister talked about the significance of performing one’s duties, adding that the mentality of ‘Rajpath’ has now changed to the sentiment of ‘Kartavya Path’.
During the programme, eight presentations were given by the Assistant Secretaries to the Prime Minister. The topics of these presentations included Poshan Tracker: tool for improved monitoring of Poshan Abhiyaan; Enabling multi-lingual voice based digital access through Bhashini; Corporate data management; Matribhoomi Geoportal – Integrated National Geoportal of India for Governance; Tourism potential of Border Roads Organisation (BRO), Changing the face of post offices through India Post Payments Bank (IPPB), Development of coastal fisheries through artificial structures like reefs; and Compressed biogas – fuel for future. This year, a total 175 IAS Officers of 2020 batch have been posted as Assistant Secretaries in 63 Ministries/Departments of Government of India from 11.07.2022 to 07.10.2022.
BJP accuses CM Kejriwal of corruption in electricity discoms
BJP on Thursday leveled another corruption charge against the Aam Aadmi Party (AAP). This time, party spokespersons Syed Zafar Islam and Harish Khurana accused Delhi Chief Minister Arvind Kejriwal of appointing chosen officials to facilitate corruption in the electricity companies and prevent audits.
BJP spokesperson Syed Zafar Islam pointed out the Delhi Chief Minister’s previous promises and accused him of “stealing” electricity. In 2013, Kejriwal used to accuse the two companies of the Anil Ambani group and Tata Discom of being “thieves”. I want to ask what happened that the man who used to talk about stopping electricity theft, is himself stealing electricity,” Islam said.
“BSES Rajdhani Power Limited (BRPS) and BSES Yamuna Power Limited (BYPL). In both these companies, 51% of the shares are with Anil Ambani and the remaining 49% with the Delhi Government. “Since the Delhi government also had a 49% stake, the government used to keep retired IAS officers, retired Finance Secretaries, and retired Revenue Secretaries as its representatives to protect their interests,” the BJP leader continued. But, Kejriwal Ji removed them and appointed his own pawns to protect his own interests and facilitate corruption. ND Gupta and Jasmine Shah are known for corruption. Kejriwal has kept them as his pawns,” Islam said
He also alleged Kejriwal of stopping the audit of the government funding and accused him of corruption by giving commissions. “The Kejriwal government took a decision in 2016 that audits will be conducted every year. But, he didn’t follow his own decision. Because, if the audit had been done, it would have revealed how much money went to the public and how much to the beneficiaries, “Islam said.” Islam said.
BJP spokesperson Harish Khurana also attacked the Kejriwal government, saying, “When the AAP government came, Kejriwal used to say that we would waive off all the electricity bills and the electricity bills would be the lowest in Delhi. He also used to accuse the power discom of being thieves”. He claimed that the public has no idea of how their money had been spent and demanded an audit of government spending.
“A total of Rs 16,233 crores has been extracted as fixed charges in the last five years. Rs 12,408 crores were given as subsidies between 2015 and 21. 2,677 crores were given as a surcharge, the regulatory assets were worth 9,195 crores, and 3,900 crores were paid for the power purchase agreement. But, the total figure stands at Rs 49,636 crores”, Khurana said.
“No one knows the calculation of this Rs 49,000 crores. I want to ask, do the people of Delhi don’t have the right to know how their money has been used? We are only asking what the Kejriwal government promised. We demand the whole audit of the government spending,” Khurana said.
The allegation comes amid a spate of corruption cases being investigated against several AAP leaders, including Manish Sisodia, Satyendra Jain, Amantullah Khan, etc.
India emerges as the world’s largest producer and consumer of sugar and world’s 2nd largest exporter of sugar
In Sugar Season (Oct-Sep) 2021-22, a record of more than 5000 Lakh Metric Tons (LMT) sugarcane was produced in the country out of which about 3574 LMT of sugarcane was crushed by sugar mills to produce about 394 LMT of sugar (Sucrose). Out of this, 35 LMT sugar was diverted to ethanol production and 359 LMT sugar was produced by sugar mills. With this, India has emerged as the world’s largest producer and consumer of sugar as well as the world’s 2nd largest exporter of sugar.
The season has proven to be a watershed season for Indian Sugar Sector. All records of sugarcane production, sugar production, sugar exports, cane procured, cane dues paid and ethanol production were made during the season.
Another shining highlight of the season is the highest exports of about 109.8 LMT that too with no financial assistance which was being extended upto 2020-21. Supportive international prices and Indian Government Policy led to this feat of Indian Sugar Industry. These exports earned foreign currency of about Rs. 40,000 crores for the country.
The success story of sugar industry is the outcome of synchronous and collaborative efforts of Central and State Governments, farmers, sugar mills, ethanol distilleries with very supportive overall ecosystem for business in the country. Timely Government interventions since last 5 years have been crucial in building the sugar sector step by step from taking them out of financial distress in 2018-19 to the stage of self-sufficiency in 2021-22.
During SS 2021-22, sugar mills procured sugarcane worth more than 1.18 lakh crore and released payment of more than 1.12 lakh crore with no financial assistance (subsidy) from Government of India. Thus, cane dues at the end of sugar season are less than ₹ 6,000 crore indicating that 95% of cane dues have already been cleared. It is also noteworthy that for SS 2020-21, more than 99.9% cane dues are cleared.
Government has been encouraging sugar mills to divert sugar to ethanol and also to export surplus sugar so that sugar mills may make payment of cane dues to farmers in time and also mills may have better financial conditions to continue their operations.
Growth of ethanol as biofuel sector in last 5 years has amply supported the sugar sector as use of sugar to ethanol has led to better financial positions of sugar mills due to faster payments, reduced working capital requirements and less blockage of funds due to less surplus sugar with mills. During 2021-22, revenue of about ₹ 18,000 crore has been made by sugar mills/distilleries from sale of ethanol which has also played its role in early clearance of cane dues of farmers. Ethanol production capacity of molasses/sugar-based distilleries has increased to 605 crore litres per annum and the progress is still continuing to meet targets of 20% blending by 2025 under Ethanol Blending with Petrol (EBP) Programme. In new season, the diversion of sugar to ethanol is expected to increase from 35 LMT to 50 LMT which would generate revenue for sugar mills amounting to about ₹ 25,000 crores.
There is an optimum closing balance of 60 LMT of sugar which is essential to meet domestic requirements for 2.5 months. The diversion of sugar to ethanol and exports led to unlocking of value chain of the whole industry as well as improved financial conditions of sugar mills leading to more optional mills in ensuing season.
DFS modifies Emergency Credit Line Guarantee Scheme for Civil Aviation sector
ECLGS necessary for collateral-free liquidity at reasonable interest rates to tide over their present cash flow problems
Recognising that an efficient and strong civil aviation sector is vital for the economic development of the country, the Department of Financial Services (DFS), Ministry of Finance, has modified the Emergency Credit Line Guarantee Scheme (ECLGS) yesterday to enhance the maximum loan amount eligibility for airlines under ECLGS 3.0 to 100% of their fund based or non-fund-based loan outstanding as on the reference dates or Rs. 1,500 crore, whichever is lower; and of the above, Rs. 500 crore shall be considered, based on equity contribution by the owners.
All other criteria terms and conditions parameters prescribed under the operational guidelines of the ECLGS on 30.8.2022 shall be applicable as it is.
The modifications introduced are aimed to give necessary collateral-free liquidity at reasonable interest rates to tide over their present cash flow problems.
Earlier in March 2022, the Emergency Credit Line Guarantee Scheme (ECLGS) was extended beyond March 2022, till March 2023, to implement the announcement made in the Union Budget 2022-23 by Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman. Keeping in view the high proportion of non-fund based credit in the overall credit of the civil aviation sector, the eligible borrowers were permitted to avail up to 50% of their highest total fund and non-fund based credit outstanding, subject to a maximum of Rs. 400 crore per borrower.
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