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Fiscal Policy: “Courts Shouldn’t Interfere” Centre Tells Supreme Court

“Policy is the domain of the government and court should not go into sector-specific financial relief. Any further relief, besides waiving of compound interest for loans up to Rs 2 crore, is detrimental to the national economy and banking sector.” In its affidavit, the government has said to supreme court. Last week, the government told the top court that it was ready to waive interest on the repayment of loans of up to Rs 2 crore. The interest waiver is applicable for loans taken by MSMEs (Micro, Small and Medium Enterprises), for educational, housing, consumer goods and auto loans and for credit card dues. “it’s not possible to give more relief to different sectors” amid the novel coronavirus pandemic, stressing that the “courts should not interfere in fiscal policy”, center informed apex court. Centre’s response came days after the top court said the government’s last week’s affidavit on waiving “interest on interest” on loans of up to Rs 2 crore – frozen by the Reserve Bank of India (RBI) in a six-month moratorium granted because of the coronavirus pandemic – was “not satisfactory”. 

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