Migrant woes 'greatest manmade tragedy' in India since Partition: Ramchandra Guha

The unfolding miseries of millions of poor people in the world's largest coronavirus lockdown are the ”greatest manmade tragedy” in India since Partition, says historian and economist Ramchandra Guha.

Cautioning that there will be social and psychological consequences for the rest of the country too, he said the migrant tragedy could have been averted or at least minimised if Prime Minister Narendra Modi had given them a week's notice to return home before the lockdown kicked in.

"It is probably not as bad as Partition, for at that time there was also horrific communal violence. But it is nonetheless the greatest manmade tragedy in India since Partition," Guha told PTI in an interview.

In a televised address on the evening of March 24, Prime Minister Modi announced a 21-day nationwide lockdown from midnight that day. The lockdown measures included banning train services, road transport and air travels to stem the spread of the novel coronavirus.

The lockdown was extended thrice but certain relaxations have been allowed since late April.

"I have no idea about how the prime minister took the decisions he did. Did he consult with knowledgeable officials, or take inputs from his cabinet ministers? Or did he act unilaterally?” asked the author of books such as “Redeeming the Republic” and “India After Gandhi”.

Even now, he added, the situation can be "slightly" salvaged if the prime minister chooses to adopt a more consultative approach, and takes advice from the best minds in the country, including those in the Opposition.

"But I rather fear that he won't. His cabinet ministers are busy shifting the responsibility to the states for cleaning up a crisis the Centre has created," the noted historian added.

Days after the lockdown came into force, lakhs of migrants, including daily wage workers, walked, cycled or hitchhiked to their home states hundreds, sometimes thousands, of kilometres away. Two months on, the exodus from cities and towns across India continues.

The images of their struggle for survival shook the nation and made global headlines, raising questions about the government's handling of the situation.

Arguing that the tragedy could have been averted if Modi had given the migrant workers at least a week's notice to return home, Guha said, "That he or his advisers did not think of the consequences of a lockdown at four hours notice is mystifying. They bear direct responsibility for the humanitarian tragedy that has since unfolded."

Guha said the tragedy has three dimensions -- public health, economy and society.

"Had the migrants been allowed to go home in mid-March, when few had COVID, they would have been safely re-integrated with their communities. Now, with so many of them infected, they are carriers of the disease," he said.

Discussing the impact of the migrant crisis on the economy, he said it would have a cascading effect.

“The economy was already in a shambles before the pandemic, and now it is in a state of near collapse. The unemployment rate is in the region of 25 per cent.

"The social and psychological dimensions are also important; now, migrants who have after so much trouble and suffering finally returned home will be unwilling to return to factories and cities in search of work," the economist said.

To a question on overall challenges such as a crumbling economy, allegations of threat to its founding principles and the pandemic facing the country, he said he is today more pessimistic about India than he has been ever been.

"This is the greatest crisis India has faced since Partition. Then, we had towering politicians like Nehru, Patel, and Ambedkar; and great, selfless social workers like Kamaladevi Chattopadhyay and Mridula Sarabhai," he said.

"These leaders set aside their personal and political differences to work together to unite India and rebuild its society and economy. Now, when we face a crisis of comparable magnitude, those in power at the Centre can think only of building their individual brand or promoting the interests of their own party," Guha observed.

"Unless that changes, and changes soon, our future seems terribly bleak," he said.

The Indian economy, Asia's third-largest, has been hit hard by the nearly two-month lockdown of 1.3 billion people. Lakhs of people have lost their livelihoods while numerous sectors, including tourism, service industry, retail trade, real estate and manufacturing, are staring at a grim future due to huge losses.

On May 12, Modi announced a Rs 20 lakh crore stimulus package to revive the economy. It is not clear yet how far it will impact to bring back the economy on its tracks.

According to an assessment by the Reserve Bank of India, the economy is expected to contract for the first time in nearly 40 years, due to demand compression and supply disruptions. PTI 

Banks face a dilemma on lowering deposit rates any further

Amid falling interest rate scenario and with growing pressure to lower lending rates and improve transmission, bankers are in a fix over balancing interests of borrowers and depositors.

There is no doubt that deposit rates are expected to go further south after RBI's rate cut on Friday. Millions of depositors face the risk of earning a lot less on their savings as lenders try to protect their margins while passing on the benefit of the rate cut to borrowers.

As deposits form a large chunk of a bank’s source of funds, any cut in lending rates is either followed or preceded by a similar cut in deposit rates. Moreover, if borrowers who are under a loan repayment moratorium right now fail to turn around and repay past dues, lenders stand to lose on interest payments. While Bank of Baroda (BoB) has 90% of its eligible borrowers availing of the moratorium, the number is 20% in the case of State Bank of India (SBI).

According to the chief executive of a mid-sized public sector bank, a cut in deposit rates is inevitable and it is not clear any longer as to what the terminal rate or the lowest possible rate could be. The banker said that at a time when large banks like SBI are lowering lending and deposit rates, smaller banks cannot afford to stay put.

“I will have to survive in the loan market and if I do not lower interest rates on my loans, some other bank will take away customers. But if I lower my deposit rates, my depositor base will suffer. It is quite a difficult situation," said the banker quoted above.

Analysts at brokerage firm Motilal Oswal said in a note on 22 May that the continued monetary easing would drive further reduction in lending yields and banks have been sharply cutting retail and bulk deposit rates over the last few months. “Large banks have reduced term deposit rates by up to 150 bps to offset margin pressure. Overall, we believe that large banks with a strong liability franchise would be able to tackle the margin pressure as compared to their mid-sized peers," the note said.

Even before the latest round of rate cuts, SBI chairman Rajnish Kumar had said last month that the bank is getting feedback from depositors complaining that their interest rates are not being protected. The central bank has cut its repo rate by 115 basis points since the beginning of 2020.

‘Ultimately there is a limit on how much we can hit the depositors. I am getting a lot of feedback from depositors that SBI does not care about depositors," Kumar had said. After RBI lowered its repo rate by 40 basis points (bps) on 22 May, Kumar said SBI will convene a meeting of its asset liability committee (ALCO), the panel that deliberates on interest rate changes. India’s largest lender pays an interest rate of 5.5% to depositors below ₹2 crore in the one-two year bracket, after a 20 bps reduction on 12 May.

According to Mrutyunjay Mahapatra, officer on special duty (OSD) at Canara Bank, customer spending has declined in the last couple of months and people are more inclined to save. This surge in supply of deposits gives banks the freedom to lower deposit rates without the risk of losing out on low-cost funds.

“Banks have to align rates to protect their margins but we have to keep in mind senior citizen depositors who keep large sums of money in banks. Indian lenders, therefore, are not always driven by business decisions but have to keep in mind the social aspect of deposit rates as well," said Mahapatra.

Since March last year, weighted average term deposit rates for public sector banks have fallen the least (39 bps). The steepest dip was in foreign bank deposit rates, by 147 bps in the same period. Private banks lowered their deposit rates by 70 bps.

PNB state wise GST number

Economic package: Banks to go all out in pushing MSME loans

After finance minister Nirmala Sitharaman met heads of public sector banks on Friday, lenders said they plan to zealously implement the government’s plan for credit push to small businesses.

At least four state-owned banks -- Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India-- pledged their support to economic relie package, including the ₹3 trillion of government-backed loans for micro, small and medium enterprises (MSMEs). Banks, led by their lobby body Indian Banks’ Association (IBA) had sought a loan guarantee scheme from the government to push credit to small businesses, hit hard by the lockdown.

Padmaja Chunduru, chief executive of Indian Bank said that the finance minister emphasised on the quick disbursal of additional loans to MSMEs, to simplify process, formats and documentation.

During deliberations, the banks decided to focus also on tier II and tier III towns in all states to ensure needy MSMEs get the succour. Head of public sector banks welcomed the ₹3 trillion fully-guaranteed loan component to MSMEs and assured the FM that all eligible units will get these loans promptly," said Chunduru.

Last week, Sitharaman announced support measures including 20% extra working capital finance for small businesses with an outstanding debt of up to ₹25 crore and sales of up to ₹100 crore, provided they have not defaulted on loan repayments.

According to Sanjiv Chadha, chief executive, Bank of Baroda, the bank will ensure that the assistance, guaranteed by the government, is made available to all borrowers in the target group. The bank’s MSME loan book for borrowers with turnover of up to ₹100 crore and loans up to ₹25 crore is about ₹60,000 crore. Considering 20% additional funds can be provided, the bank can give loans of about ₹10,000-12,000 crore

At the end of the day there are very few clients who would have the strength to survive this crisis without assistance at this juncture, particularly the MSMEs," said Chadha.

PSBs have been at the forefront of covid-19-related loans and have, since the lockdown, been providing emergency credit lines to small businesses, retail borrowers and even corporates.

“The pickup of these covid-19 emergency credit lines has been good. The number of sanctions is in hundreds of thousands and the actual disbursements in in tens of thousands. Understandably, during the lockdown not everybody has been able to come to banks and execute documents which are required," said Chadha.

Another public sector lender Canara Bank said in a statement that it has sanctioned nearly 6 lakh loans amounting to ₹4,300 crore to agriculture, self-help groups (SHGs) and retail borrowers. L V Prabhakar, chief executive, Canara Bank said, “We are sure that once the lockdown is completely lifted, our customers would be able to avail the sanctioned facilities to the full extent and improve their business."

Meanwhile Central Bank of India chief executive Pallav Mohapatra was quoted by PTI as saying that the finance minister took stock of the situation and reviewed the progress of various schemes. "All the banks are very-very optimistic about the schemes that have been announced in the recent past by the government to support the economy. State-run banks’ sanction in the covid-19 period is more than the corresponding period last year, which was a normal year," said Mohapatra.

Give loan to eligible borrowers without fear of CBI, CVC and CAG: FM to banks

Finance Minister Nirmala Sitharaman on Saturday said banks have been asked to extend loans automatically to eligible borrowers without fear of 3Cs -- CBI, CVC and CAG.

She said clear instructions have been given in a meeting with CEOs and MDs of public sector banks and financial institutions on Friday that the banks should not be scared to extend loans as 100 per cent guarantee is being given by the government.

In case of default, the individual bank or official will not be hauled up, she said in a conversation with BJP leader Nalin Kohli uploaded on the party's social media platforms.

"Yesterday, I reiterated that by saying, if a decision goes wrong, and if there is a loss, the government has given 100 per cent guarantee now. It is not at all going to be on the individual official and on the bank, and therefore without fear they should take this automatic route in the sense, everybody eligible for additional term loan and additional working capital should be given," she said.

As part of the ₹20.97 lakh crore comprehensive economic package, the government announced the Emergency Credit Line Guarantee Scheme (ECLGS) worth ₹3-lakh crore for the MSME sector, hit hard by the coronavirus crisis.

It is being said that the genuine bonafide decisions in the banking sector are being impacted because of the worry of undue harassment by 3Cs--Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC) and Comptroller and Audit General (CAG).

The Finance Ministry has taken several steps to allay those fears including withdrawing some of the notifications which were causing fears among bankers, she said.

"...concerns these banks have had in their minds earlier, and may have even now are absolutely well founded. In fact, through my last 7-8 months, I have spent at least three different times with the banks to say that the fear of the 3Cs as they refer to the CBI, CVC, and also the CAG should not be in their minds," she said.

When asked about criticism about leaving many critical sectors including hospitality, auto and civil aviation in the economic package, Sitharaman said the government has not taken a sectoral approach but a holistic approach.

"Except agriculture and the power sectors where reforms would be undertaken, other than that I have not come up with any sectoral reference. What has now become to be called as MSME package, it includes MSME, and also aims at touching others (sectors) too,..So the sectors that you are referring to can also benefit through this," she said.

It is based on the understanding that any enterprise "with a certain exposure to the bank and with a certain invested capital, or with a certain turnover if they need additional term loan, additional working capital in order to buy their own material to restart, in order to be able to pay some fixed cost, it can take that route," she said.

She expressed hope that from June 1, liquidity would start flowing from banks without any new collateral.

During the meeting with bankers, the Finance Minister said it was emphasised that the loans should be sanctioned in a simple manner and if possible digitally to avoid any physical contact.

Treatment of absence of bank employee during lock down period

25% REDUCED TDS & TCS FROM MAY 14: WHO ARE ELIGIBLE AND WHO ARE NOT?

The Central Board of Income Tax on Wednesday (May 13) Vide circular Number 280/2020 dated 13-04-2020,  ordered a 25% reduction in the rate of income tax deducted at source (TDS) and tax collection at source (TCS) from 14 May to 31 March to provide more money in the hands of taxpayers. This reduced rate of TDS will apply to the specified list of payments including dividend, payment to contractors and sub-contractors, insurance commission, brokerage, rent for machinery and immovable property and professional fee, in order to provide more funds at the disposal of the Taxpayers for dealing with the economic situation arising out of COVID-19 pandemic. The revised rates of Tax Deduction at Source (TDS) are done only for the Non-Salaried specified payments made to Residents. Concessions provided only in case of payment to a Resident Individual, HUF, Association of Persons [AOP], Body of Individuals [BOI], Domestic Company, Firm, Cooperative Society, etc. where PAN of the deductee is available. Further, the reduced rate applies to payments made between May 14, 2020, and March 31, 2021, so this will not cover payments made before 14 May 2020. The taxpayers must remember that the relief now offered by the Government does not reduce their income tax liability. The taxpayers shall eventually have to pay the tax at the applicable tax slab rates for the financial year 2020-21, depending on the income. Those who are liable for advance tax will have to make the payment every quarter. Others will have to pay when filing income tax returns.

Here is the comprehensive table of existing and new reduced rates issued by the Income Tax department.

Sr.No	Section	Nature of payment	Existing Tax rate (From 01.04.2020 to 13.05.2020)	Revised Tax rate (From (14.05.2020 to 31.03.2020)
1	194 A	Interest on deposits for more than Rs.40000 in a financial year. For senior citizen: Interest on deposits for more than Rs.50000 in a financial year.	10%	7.50%
2	194C	Payment to Contractor/ Sub- Contractor/ Advertisement more than Rs. 30,000 per contract or aggregate amount Rs.1,00,000 in a Financial Year [These provisions are also applicable to a Transport contractor]	Individual, HUF  :1% AOP/BOI/Domestic company/firm or any other persons:2%	Individual, HUF  : 0.75% AOP/BOI/Domestic company/firm or any other persons:1.50%
3	194 H	Commission or Brokerage more than Rs.15,000 during a Financial Year	5%	3.75%
4	194I	Rent more than Rs.2,40,000 during a Financial Year	Plant and machinery including generator:2%Land, Building, Furniture or Fittings :10%	Plant and machinery including generator: 1.50% Land, Building, Furniture or Fittings :7.50%
5	194-IA	Payment for transfer of Immovable Property other than Agricultural Land	1%	0.75%
6.a	194J	Fee for Professional [Please refer Note (ii)] or Technical Services more than Rs.30,000 in a Financial Year( For individuals,HUF, AOP,BOI domestic company or firm)	10%	7.50%
6.b	194J	TDS for any Remuneration or Fees or Commission (other than those on which tax is deductible under Section 192) to a director of a company(including our bank)(without any threshold limit)	10%	7.50%
7.a	194N	Cash Withdrawal exceeding Rs 1 Crores during the financial year up to 30-June-2020	2%	2%
7.b	194N	Cash Withdrawal exceeding Rs 1 Crores during the financial year	Cash withdrawal upto Rs.20 lakhs: ->   Cash withdrawal exceeding  Rs.20 lakhs and up to one crore:->   Cash withdrawal exceeding  Rs.one Crore->	No TDS   TDS @ 2% of amount exceeding Rs 20 Lakhs     TDS @ 5% of amount exceeding Rs 1 Crs

The reduced rates of TDS and TCS shown above are not applicable to Non-PAN  deductees. So there shall be no reduction in rates of TDS or TCS for those who do not furnish PAN numbers.

WHAT IS THE DIFFERENCE BETWEEN FITL AND WCTL?

What is FITL?

Funded Interest Term Loan in a short form known as FITL. When the manufacturing units face severe financial crises, not able to meet their loan obligations, banks extend the FITL facility to such units by way of a rehabilitation package if such units are considered potentially viable. This type of loan is given by the lenders to the borrower for repaying the interest component of the existing loan.  However, before taking a decision to extend this type of additional loan lending institutions need to be convinced that (i) the borrower did not divert the earlier loans and (ii) he is unable to repay even the interest component.  In the FITL scheme of loan, banks usually offer a moratorium (maximum two years) to repay the FITL loan to improve or restore the liquidity of the unit so that it can continue its operations. Further, this type of loan is usually a part of the deep restructuring, which involves longer-than-usual repayment terms that would offer respite to the borrower to liquidate the loan. Correspondingly, by extending FITL the bank and financial institutions may be able to save the account from turning into an NPA. The rate of interest on FITL may be the same as applicable to normal term loans.

RBI allows banks to offer FITL to borrowers under a debt recast scheme. The upgrade or downgrade of a restructured loan will be applicable to FITL as well. As per RBI master circular, Prudential Norms for Conversion of Unpaid Interest into ‘Funded Interest Term Loan’ (FITL), Debt or Equity Instruments, the FITL / debt or equity instrument created by conversion of unpaid interest will be classified in the same asset classification category in which the restructured advance has been classified. Further movement in the asset classification of FITL / debt or equity instruments would also be determined based on the subsequent asset classification of the restructured advance.

What is Working Capital Term Loan (WCTL)?

Working capital, as the name indicates, is the operating capital of a business which is used in its day-to-day operations. The formula for working capital is calculated as the current assets minus the current liabilities. The positive working capital commonly indicates that a company is able to pay off its short-term liabilities almost immediately.  The Cash Credit/ Overdraft against inventories and book debts, Demand Loan portion under Loan System for Delivery of Bank Credit (if permissible working capital finance is above Rs.10 Crore), Packing Credit against inventories, Bills purchased /Discounted (inland & foreign), Cash Credit against book debts/Cheque purchase, Working capital term loan (for excess borrowing) are the types of loans and advances which are considered as working capital finance.

An enterprise starts feeling the cash crunch when it is making losses or faces current asset-liability mismatch. The current asset-liability mismatch arises when working capital funds are used to capital expenditure (CAPEX) or major expansion plans. When a company uses short term sources to long term use, it will be reflected in the distortion of short term financial parameters like Current Ratio less than 1.0, negative net working capital, and maximum permissible bank finance (MPBF) less than working capital limits already enjoyed, etc.  Business enterprises also face cash crunch due to irregular cash flow (when the realization of receivables get slow), due to a longer period of stock turnover (usually when production activities take place during the off-seasons to supply fulfill the demands during the peak season), lack of cash reserves to meet some urgent commitments, or taking up a new opportunity which requires immediate availability of funds to click the deal.

As said earlier, a working capital term loan is accorded as long-term working capital credit facilities to entrepreneurs to correct asset-liability mismatch (of course which is a wrong practice and not treated kindly by banks), or to manage glitches in business cash flows, or to support the extra working capital requirements on the incremental business opportunity. The need-based working capital term loan assistance provided by the lenders only to units considered as potentially viable by them. Banks may assess and provide working capital term loans, according to their lending norms. The irregular portion of cash credit i.e. core irregularity other than unrealised interest* may also be converted into WCTL.  Under rehabilitation programs of RBI, Banks and Financial Institutions also offer a relief /concession to potentially sick MSME Units and extend WCTL in order to manage the shortfall in their working capital requirements.

RBI SLASHES REPO RATE AND ANNOUNCES A SERIES OF MEASURES IN ITS ADVANCED MPC MEETING

A cut in policy repo rate, an extension of the moratorium on loans by another three months, [taking the total period of applicability of the measures to six months (i.e. from March 1, 2020, to August 31, 2020)], relief for corporates by permitting lenders to convert the accumulated interest on working capital facilities over the total deferment period of 6 months (i.e. March 1, 2020, up to August 31, 2020) into a funded interest term loan (FITL) which shall be fully repaid during the course of the current financial year, ending March 31, 2021, and increase in group exposure limit of banks is being increased from 25 percent to 30 percent of eligible capital base,  are key measures announced by the RBI to tackle the ongoing pandemic crisis. The lending institutions are being permitted to restore the margins for working capital to their original levels by March 31, 2021. Similarly, the measures pertaining to reassessment of working capital cycle are being extended up to March 31, 2021

Today (May 22, 2020), the Monetary Policy Committee (MPC) advance its meeting scheduled for June 3 to 5, 2020, and announced the slashing of all the key policy rates from immediate effect. As announced in today’s Monetary Policy Statement, 2020-21, it was decided to reduce the policy Repo rate under the Liquidity Adjustment Facility (LAF) by 40 basis points from 4.40 percent to 4.00 percent and the Reverse Repo rate under the LAF stands adjusted to 3.35 percent with immediate effect. The Marginal Standing Facility (MSF) rate stands adjusted from 4.65 percent to 4.25 percent with immediate effect.

Consequently, all key policy rates with effect from May 22, 2020 are as under:

CRR (Cash Reserve Ratio)	3.00%
SLR  (Statutory Liquidity Ratio)	18.00 %
Repo Rate	4.00%
Reverse Repo Rate	3.35%
MSF Rate (Marginal Standing Facility Rate)	4.25%
Bank Rate	4.25%

All other terms and conditions of the extant LAF Scheme will remain unchanged.

Assessment:

In its assessment of domestic outlook, MPC said, “From the incomplete data that have been made available, food inflation, which had eased from its January 2020 peak for the second successive month in March, suddenly reversed and surged to 8.6 percent in April as supply disruptions took their toll, immune to the ongoing demand compression. As per the statement, prices of vegetables, pulses, edible oils, milk, and cereals emerged as pressure points. Against this backdrop, the MPC assessed that the inflation outlook is highly uncertain and risks being gravest, the statement said. Further, it is stated that the inflation outlook has become complicated by the release of partial information on the consumer price index (CPI) by the National Statistical Office (NSO), obscuring a comprehensive assessment of the price situation, said.

Why bankers are disappointed with announcements on MSME loans

The loan guarantee scheme for micro, small and medium enterprises (MSMEs) will not be available to businesses which had repayments overdue by more than 30 days as on February 29, 2020, according to the draft guidelines issued by the Small Industries Development Bank of India (Sidbi).

“We were expecting the guarantee on loans to come from the government of India, but it has come from CGTMSE instead of being a sovereign guarantee,” the head of a public-sector bank (PSB) told FE. “CGTMSE has its caveats..it does not give you the full money, which is lost,” he added. For stressed MSMEs and those whose loans have turned bad, a Rs 20,000-crore subordinated debt scheme has been envisaged.

The interest rate on additional emergency funding has been capped at 1% over a bank’s marginal cost of funds based lending rate (MCLR) and at 14% for non banking financial companies (NBFCs). Lenders believe the interest rates are justified as there will be some capital charges. “When government guarantees a loan, capital charges become zero, but in case of CGTMSE guarantee, there will be some capital charges,” a second banker told FE.

The draft guidelines state that the guarantee scheme will apply to all additional emergency credit lines sanctioned to MSMEs after March 1, 2020 till August 31, 2020. The amount of emergency working capital funding would be equivalent to 15% of the working capital for loans up to Rs 1 crore. For loans between Rs 1 crore to Rs 25 crore the emergency working capital funding would be equivalent to 10% of the working capital.

“In case the amount of emergency fund as per above threshold is not able to cover six months of salary outgo (including contractual worker) for people employed by MSME, the working capital fund has to be enhanced to the amount of 6 months of salary outgo,” the draft guidelines said, adding that lenders must obtain necessary proof to ascertain the salary outgo of the MSME.

This is to ensure that MSMEs don’t lay off any employee due to the lack of funds.” In case a borrower has existing limits with more than one lender, the emergency funding limit can be availed with only one lender.

Bankers are at a risk in Covid-19 and their services are not being recognised by the government as such

Bankers and bank unions have expressed concerns about the economic stimulus package outlined by Finance Minister Nirmala Sitharaman and have called for more protection and improved conditions for bank employees who have been working during the lockdown.

Many bankers raised questions on Twitter on wage revision, pointing out that while bankers have been carrying out operations on a daily basis amid the national lockdown and novel coronavirus infection, their demands for wage hike have been pending.

Banks have been the fulcrum of the economy, especially at this juncture when there is a pandemic and our service is not being recognised by the government,” said Soumya Datta, General Secretary, All-India Bank Officers’ Confederation (AIBOC), adding that the merger of the public sector banks was done at a most “inopportune time” and could be demotivating to the morale of public sector bank employees.

The Finance Minister’s proposals to privatise public sector enterprises, as well as exclusion of coronavirus-related debt from the definition of default and no fresh initiation of insolvency for one year under the Insolvency and Bankruptcy Code, also raised concerns.

“Privatisation is totally a wrong measure. Also, there should be more measures to ensure recovery of bad loans, especially when the non-performing assets of banks are near ₹10-lakh crore. This is half the size of the ₹20-lakh crore economic package,” noted CH Venkatachalam, General Secretary, All-India Bank Employees’ Association.

Wage negotiations

Venkatachalam said the All-India Bank Employees’ Association is not pursuing wage negotiations talks during the current pandemic.

Dutta of AIBOC noted that bankers are at a risk in Covid-19 and their services are not being recognised by the government as such. Bankers had also sought insurance cover for bank staff against Covid19.

Talks between the Indian Banks’ Association and the bank unions have remained inconclusive on wage revision in public sector banks.

Privatization of PSUs

Privatization  of PSUs
Government to privatise non-strategic PSUs: FM

In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed.
Finance Minister Nirmala Sitharaman on Sunday said a new “coherent” public sector enterprises policy will be formulated that will define strategic sectors which will have not more than four PSUs.
List of strategic sectors requiring presence of public sector undertakings (PSUs) in public interest will be notified, she said while announcing her fifth and final economic stimulus package.

In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed.
In other sectors, PSUs will be privatised.

“To minise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/merged/brought under holding companies,” she said.

Over 50% of rural households eating lesser meals, consuming fewer items: Survey

A study conducted to know the effect of the COVID-19 induced lockdown on rural households has revealed that indebtedness among rural poor is rising and nearly 40% of the respondents have already had to borrow from their kin or professional money lenders to meet subsistence costs.

While the months of peak food insecurity in most rain-fed regions are July and August, the study found that people are already experiencing food insecurity. More than half of the households surveyed have begun consuming fewer items and eating fewer meals every day than similar periods in normal times.

A majority of households have very limited stocks of food grown by them in the last Kharif or Rabi cropping season and will be solely dependent on the food supply through the PDS (public distribution system).

Around one-third of the respondents have reported that Kharif stock would only last till May end while more than one-third do not have seeds for the upcoming Kharif season. 

The study notes that preparedness for Kharif 2020 is low and there is need for public support in terms of seed provision and credit. 

The study titled “COVID-19 induced Lockdown – How is the Hinterland Coping?” was a collaborative effort by PRADAN, Action for Social Advancement, BAIF, Transform Rural India Foundation, Grameen Sahara, SAATHI-UP and The Aga Khan Rural Support Programme (India), along with research support of VikasAnvesh Foundation and Sambodhi. 

Early signs of acute distress are visible: All discretionary expenses on marriages or similar ceremonies are being cut down drastically. Their children are likely to be withdrawn from schools in 30% of the households, the study states. 

Households have begun depleting productive assets with households selling even bullocks or milch animals.

With only a sixth of the households reporting return of their migrant members, the workload on women has significantly increased for fetching water and fuelwood and the drudgery shows no sign of abating.  

Usually, migrant family members return just prior to Kharif sowing but come with cash savings made by them in the cities. This time, however, they will return exhausted and with empty pockets and this situation can only become worse with their arrival in the villages, the study notes. 

As many as 40% of households reported having no seeds nor any access to farm credit for initiating Kharif operations.

Lockdown and rumours surrounding COVID-19 have adversely affected income from key livelihood activities. Out of 56% households in poultry, more than 40% reported reduction in sales.  

The survey involved 5,162 households across 12 states and 47 districts. The data collection took place between April 27 and May 2.  

Suspending labour laws is a false choice’: Wipro's Azim Premji

The death of sixteen migrant workers who were mowed down by a train last week is ‘an unforgivable tragedy’, Wipro's Founder Chairman Azim Premji has said in an article authored by him in the Economic Times on Saturday.

This tragedy, he said, is one of the most wrenching markers of the tremendous misery being faced by the weakest and the poorest in this country.

In this context, Azim Premji expressed shock over state governments considering the suspension of some of the labour laws related to settling industrial disputes, occupational safety, working conditions, trade unions, migrant labourers, minimum wages, among others.

He called this a false choice, which would put workers and businesses against each other.

“Over the past few decades labour laws have changed such that they are hardly among industry’s top constraints. At the same time, social security measures have not increased, thus worsening the precarity of the employed. Diluting these already lax laws will not boost economic activity, it will only exacerbate the conditions of the low wage earners and the poor,” he added.

It is the lack of social security and worker protection that killed those sixteen young men, and not because there is too much of it, he further said.

According to him, it is the unjust treatment of the migrant labour that triggered the mass reverse migration.

Further, at a time when the economic crisis is having a devastating impact on the rural agrarian sector, and the informal economy, Azam Premji believes that taking the approach of “‘livelihoods versus lives’, meaning reviving economic activity versus measures to tackle the pandemic, is not only a false choice but also a dysfunctional and unethical way of framing the issue. 

"The pandemic must be dealt with on the healthcare front fully and comprehensively, while the people and the economy must be supported, equally to ameliorate the immediate human suffering and to minimise long-term damage. Given the seriousness of the situation, the Union and State Governments must play a central role," he said.

While welcoming the Rs 20 lakh crore economic package announced by the government, Azim Premji also made some suggestions on what actions could be taken over the next 1-2 years.

For starters, he said that the 10% of the GDP that PM Modi announced for battling the crisis, should be in addition to the already committed government expenditure and interventions and should in no way be a reclassification of the earlier commitments.

Emergency cash relief of Rs 7,000 per month for at least 3 months: This, Azim Premji suggested, should be given to each poor household/migrant worker without biometric authentication. He also suggested that minimum wages for 25 days per month should be released to all poor urban residents for the period of the lockdown and for at least two months post the lockdown.

Expanding Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA): Azim Premji believes that an additional allocation Rs 1 lakh crore should be made to MGNREGA, along with increasing the guaranteed number of days per household and increasing the daily wage. This will help all those who demand work, he said.

Social security and food security: These, he said, are the most important actions to mitigate the humanitarian crisis. “We must universalise and double the PDS ration for 3-6 months and distribute it free through doorstep delivery along with cooking oil, pulses, salt, masala, sanitary pads and soap in advance to all,” he wrote.

Autonomy for stranded migrant workers: No one should be forced either to stay back or to return to their home states, he said. Stranded migrant workers should be allowed to travel for free on buses and trains.

Ensuring timely payment of wages: Azim Premji suggested that an Urban Employment Guarantee Scheme similar to the MNREGA be designed and rolled out. Both these schemes can enable creation of infrastructure and agrarian assets, which will form the backbone of the countries’ economic revival, he said, further adding that a “serious and sustained Investment in public health will help the campaign against this and future pandemics, and help build up a desperately needed functioning and responsive National Health System in our country.”

Public investment in agriculture: Premji said that there should be some money allocated to increase public investment in agriculture to “promote sustainable farming initiatives, stronger procurement systems for grains at remunerative prices, and the expansion of local storage and value-addition for perishable crops.

COVID Patient’s Body Found at Ahmedabad Bus Stand, CM Orders Probe

In a bizarre incident, a COVID-19 positive patient’s body was found at a bus stand in Ahmedabad on Friday, 15 May.

The 67-year-old patient was admitted to the Ahmedabad Civil Hospital on 10 May and he tested positive two days later, his son told The Quint. “On 15 May, we received a call from the police saying my father’s body was found at the bus rapid transit system (BRTS) station near Danilimda Crossing in Ahmedabad.”

Police officials told The Quint that the man was asymptomatic and had filled the form for home isolation. Following that, a bus arranged by the authorities had taken the patient from the civil hospital.Dr MM Prabhakar, the officer on special duty at the Ahmedabad Civil Hospital, said “The patient had very mild symptoms and as per new protocols, he was asked to home quarantine. He was discharged on 14 May (a day before his body was found). When he was being discharged, he was adequately fit.”

Prabhakar said, “The hospital’s transport system took him from the hospital but probably because the road was congested near his house, he was dropped at a neighbouring bus stand.” He added, “It is not immediately clear whether his family members were informed about his discharge.”

Why was he dropped at a bus stand? Why was his family not informed during his release? The police said the matter “is under investigation.”

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The patient’s son said, “Despite my father being a COVID patient, the family members carried out the cremation procedure. We were just asked to wrap his body in plastic.”