Many Indian households are likely to experience financial distress in the aftermath of the Covid-19 pandemic. Unemployment rates, according to the Center for Monitoring Indian Economy, increased from around 8 per cent in February to approximately 23 per cent in May 2020. In many cases, especially for migrant workers, the situation has metamorphosed into a humanitarian crisis with even food security on the line. It is likely that many households, especially low-income households (LIH) will not be able to service their outstanding debt to the extent needed once the RBIs moratorium period is crossed in August 2020.
Since it is unclear whether economic lives will return to pre-Covid levels, it is reasonable to conclude conservatively that t…
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