Srinagar, July 19: The government provided a big relief to the people by putting a moratorium on the Easy Monthly Installments (EMIs) in the COVID times but the interest component being charged by the banks has left borrowers high and dry.
The moratorium will remain applicable till August 31, 2020 and after that people will have to restart paying their EMIs. The Administrative Council which met in Srinagar recently has moved the proposal for interest subvention on loans.
When RBI had announced the moratorium on EMIs it had made clear that moratorium is applicable on EMIs only and banks will keep on charging the interest. The only relief for the borrowers has been that they were not pressed to pay their installments.
An analyst while talking to Early Times said, “The interest subvention proposal being prepared by the Administrative Council is a welcome step. If it gets approved it will be a big relief for the borrowers especially in Kashmir.”
He said, “During the past more than 11-months the economy has slowed down in the Valley. Many people have lost their jobs. Businessmen are facing a number of issues due to everything getting hit.”
The businessmen in Kashmir are demanding that the Centre should announce a special package for them as they have been in a total mess for more than 11-months. Till date the government has not given any specific assurance to the traders but they are hoping something will happen.
“Kashmir has been facing a difficult situation. If the government fails to intervene it will lead to many business houses winding up their operations in the Valley and calling it quits,” said an observer.
He said that till date many big companies and brands have winded up their operations in the Valley due to the prevailing uncertainty. “If banks waive off the interest of the last six months it will provide some relief to the businessmen as well as the employees of the private sector who have lost their jobs due to COVID-19 pandemic,” the observer added.
He said, “The government will have to take some concrete steps to put the economy back on track after the pandemic ends. Lip service won’t help anyone. Some concrete plan has to be formulated to make things work.”
Another analyst said, “There are a number of reasons for the economic situation in Kashmir turning from bad to worse. When the Centre abrogated J&K’s special status on August 5, 2019, strict restrictions were imposed. This was followed by the shutdown which continued till November. By the time life returned to normal winter had arrived in Kashmir. With the advent of the Spring season in March COVID-19 arrived and since then everything has been under a lockdown.”
He said, “Centre is aware about the prevailing economic conditions in the Valley. It needs to take a holistic view of the situation and then decide.”