What is MORATORIUM? Is it really beneficial to middle class families in India?

A moratorium period is a time during a credit term when the borrower isn't required to make any payment. It is a holding up period before which payment of EMIs resumes.

Corona-hit India has so far got bailout packages worth Rs 20 Lack crore. Government’s biggest Covid-19 bailout offer for EMI paying middle class came with the fact that they cannot decide if it is really beneficial for them? Sure, they can defer loan EMIs for 3 months, but the option comes with an additional interest burden. It is hardly gainful.

Small borrowers cannot ask to waive off the principal amount, but their commitment to pay interest could have been waived. How can banks and governments charge interest when it is a case of middle-class people every time?

There is no such relief given in the bailout COVID-19 package for the common man. People understand that they will not have to pay EMIs for 3 months and their loan term will be increased to additionally 3 months, but they are wrong and they get this information when they visit their banks and understand the whole process because they will have to pay additional interest on their dues. Right now, an emergency chain is actuated the second an EMI-paying person's pay is hit, rendering the individual unequipped for taking care of obligations. It eventually makes the developer unable to repay their instalments to financial institutions, resulting in an economic logjam. The corporate debtor then invokes force majeure to save itself from penal consequences of default in repayment or delay in handovers, but same is not the case with the middle-class man whose income really hit badly with this Covid-19 pandemic. 

The middle class is neither asking for a total waiver of their EMIs nor can leave the country like real big defaulters. But to charge interest on the already affected individuals, who could have faced salary cut or loss of job from the employer, is cruelty. Rules are rules and it should be applicable to everyone in the same manner and so there should be an option for a common man to opt for force majeure-relief which is available for corporate. After all, the pandemic has not only hit corporate and rich people.