Central government’s response to the COVID-19 pandemic (May 23 - May 29, 2020)
Distilled Policy Brief
- The Reserve Bank of India extended the term loan moratorium by another three months till August 31, 2020, without resulting in a downgrade of asset classification, and relaxed the group exposure limit for banks from 25% to 30%.
- Domestic air travel resumed with one-third capacity, and the Ministry of Civil Aviation capped minimum and maximum fares across seven sectors based on flight duration.
- The Supreme Court issued interim directions requiring state and central governments to provide free transport, food, water, and health screening to stranded migrant workers without charging any travel fare.
🎯 Prelims High-Yield Examination Points
The RBI permitted a loan moratorium extension up to August 31, 2020, and relaxed the bank group exposure limit to 30% of the capital base.
⚖️ Mains Analytical & Syllabus Linkages
Examine the role of monetary policy measures and judicial interventions in mitigating socio-economic distress during public health emergencies like the COVID-19 pandemic.
🎯 UPSC Prelims Practice Drill
With reference to the regulatory and policy measures undertaken by authorities during the COVID-19 pandemic in May 2020, consider the following statements: 1. The Reserve Bank of India extended the term loan moratorium without resulting in a downgrade of asset classification. 2. The Reserve Bank of India increased the group exposure limit for banks from 25% to 30% of their eligible capital base. 3. Domestic air travel resumed with full operating capacity, while fares were deregulated completely across all sectors. Which of the statements given above are correct?
- [A] 1 and 2 only
- [B] 2 and 3 only
- [C] 1 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
Statement 1 is correct: The RBI extended the term loan moratorium by another three months till August 31, 2020, without resulting in a downgrade of asset classification. Statement 2 is correct: The RBI relaxed the group exposure limit for banks from 25% to 30% of the eligible capital base as a one-time measure. Statement 3 is incorrect because domestic air travel resumed with only one-third capacity, and the Ministry of Civil Aviation capped minimum and maximum fares across seven sectors based on flight duration rather than deregulating them.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.