Just when economic recovery was taking shape, the volatile borders have left the market clueless. As a border face-off could linger for a while, the market continues to remain in the doldrums.
The situation at the border has shocked and angered Indians and calls for boycotting Chinese products are rising. In this backdrop, the Confederation of All India Traders (CAIT) has prepared a list of more than 500 ‘Made in China’ products for boycott.
The list includes goods from textile, leather and gems and jewellery industries. These products can be easily manufactured in India and don't require advanced technologies.
From the viewpoint of a nationalist, CAIT's decision could be commendable. However, India's capacity to cater to the demand on its own remains a key concern. Judging from the realm of practicality, such calls often die down as mere rhetorics.
A waiver on interest: The tussle goes on
The tussle over the waiver on interest continued as the Supreme court adopted a hard stance. The apex court's observation that it doesn't see merit in charging interest on interest came under sharp scrutiny.
The bankers are opposing this stance with State Bank of India leading the charge. The bank in a counter-argument said that 90% of borrowers had not even sought a moratorium and interest waiver cannot be issued "like a free gift".
The Supreme Court's stance is valid when it says, once you fix a moratorium, it should serve the desired purpose. However, our heart goes out with the argument of SBI. We believe that a moratorium is a privilege offered to borrowers and like any privilege, it should come at a price.
Waiver of interest would be equivalent to punishing honest borrowers. It could undermine those who continued paying their EMIs regularly during the difficult lockdown period. Besides, it could prompt many borrowers to take moratoriums more out of convenience and less out of need.
The reaction in the market is not that of panic yet. However, precaution is definitely in place. Calls for boycotting Chinese products makes for great rhetoric. But, considering the high dependence of Indian manufacturers over the Chinese supply of raw materials and cost benefits, makes it impractical to execute it in reality.
Given the constraints that India is already facing, issues like waiver on interest are the hurdles we could do away with. In this environment, all the institutions (including the judiciary) need to back India Inc as much as possible. Hence, it is in the best interest that such issues get sorted with a mutual agreement.
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