Indian Middle Class: The people that time forgot

Punishing the suffering people is not good. But who stays good in this Gotham-esque world anyway? Not offering a debt moratorium citing lack of credit discipline is like caning the poor child. If someone has a lot of money and he has invested it in stock market instead of repaying loans, then the accusation of lack of credit discipline makes sense. But majority of the borrowers have lost their livelihood and are just surviving every day. Calling them undisciplined is unacceptable. Writing accounts off as NPA is literally killing the future of such people, especially when 70% of India is under 30, it is literally killing the futures of young borrowers. The CIBIL TransUnion scores of such young borrowers will take a big hit. Hassles from recovery agents, multiple trips to bank branches and standing in serpentine long lines will begin, deja vu for those who have faced demonetization a few years ago.

A damaged credit score will take years to repair. Repayment of new loans will improve score but with limited credit on offer people won't be able to study or buy cars or buy homes. Reserve Bank of India and Government of India have sealed the fate of Indians. They may have saved the debt to GDP as of now, but they didn't stand by the people when they needed them the most.

This is exactly where the role of supreme court of India becomes crucial. Judicial activism has been on the rise in almost entire world. In judicial activism, courts take suo motu cognizance of social malaise and issue orders to cure them. I think when legislature and executive have failed and forgotten the middle class then judiciary should step in and assert judicial supremacy and save the future lives and livelihood of millions of Indians.

I talked about how untenable is the argument that extending moratorium will impair the credit discipline among Indians and impact credit creation. I will also mention that the argument that judiciary should not intervene into the functioning of the regulatory bodies is also incorrect.

When pricing issue for KG-D6 oil exploration came up, the aggrieved parties went to the court and the court intervened. When telecom operators started differentiated pricing, the aggrieved parties went to the court and the court intervened. Petroleum and Natural Gas Regulatory Board (PNGRB) and Telecom Regulatory Authority of India (TRAI) are regulatory bodies too. If courts can intervene and pronounce judgements impacting the functioning of these regulatory bodies, why cannot court intervene and tell Finance Ministry and RBI how to do their job?

Looking forward to your thoughts.

EDIT