A lending hand

The RBI has signalled it is aware of the burden on health-care providers during this period

GS 3: Indian Economy


  • The Reserve Bank of India’s announced to step in and join the fight against the second wave of the pandemic through the announcement of various measures.
  • The measures aimed at alleviating any financing constraint for those impacted, including the health-care sector, State governments and the public.

The financial help

  • The furious pace at which new COVID-19 infections and fatalities have been mounting in recent weeks has not only overwhelmed the nation’s health infrastructure but has begun to significantly impair economic activity.
  • Acknowledging the challenge RBI Governor Shanktikanta Das said “The fresh crisis is still unfolding,”. Stressing that it is imperative to both save lives and restore livelihood.
  •  RBI proposed a calibrated response, mooting a ?50,000 crore term liquidity facility to boost credit availability for ramping up COVID-related health-care infrastructure and services.
  • Lenders have been urged to expedite lending under this ‘priority sector’ classified scheme to entities including vaccine manufacturers, hospitals, pathology labs, suppliers of oxygen and ventilators, importers of COVID-related drugs and logistics firms.
  • The scheme would also cover patients requiring treatment, but it remains unclear to those with surging medical facilities will be able avail the facility.
  •  In directing the flow of credit to the sector most in focus at the moment, the RBI has signalled it is cognisant of the burden on health-care and allied providers.
  • The central bank’s focus on small borrowers including unorganised businesses and MSM enterprises, both through enhanced provision of credit via small finance banks and a fresh resolution framework for existing borrowings, is welcoming.
  • However, the caveat here is only those borrowers who had not already availed of restructuring assistance and whose loans were ‘standard’ as on March 31, 2021, would be eligible for fresh resolution lays an onerous burden on those that the RBI itself admits are the ‘most vulnerable’. 
  • The RBI Governor seemed sanguine about the economic impact of the second wave, even as he granted that “high frequency indicators are emitting mixed signals”.

The RBI’s position that the dent to aggregate demand is likely to be only moderate is based on the fact that so far this year, the restrictions to contain the spread of the virus have been largely localised. With more and more voices from the Opposition to top industry groups urging a nationwide lockdown to break the chain of transmission, there is a need for revisiting the reforms.

2. In Ireland’s complex troubles, lessons for India

A functioning democracy must commit to addressing communal issues with vigilance, tolerance and compromise

GS 1: Communalism


  • The communal clashes took place in April in Northern Ireland contains many relevant lessons and warnings for India.
  • Those riots, that left 74 policemen injured, threaten to undermine the fragile peace between Protestant pro-British loyalist unionists who want to remain part of the United Kingdom forever, and Catholic pro-Irish nationalists who wish Northern Ireland to become part of the Republic of Ireland.
  • The riots are the culmination of a complex mix of change, resistance to change, and ingrained political and social inertia.
  • Northern Ireland altered enormously for the better after the signing of the Anglo-Irish Good Friday Agreement in 1998, and for the accord to have received strong support across the divided island was a remarkable achievement.  
  • This Agreement began the process of dismantling border controls between the North and the Republic of Ireland. Many social issues remained unaddressed: both religious communities ‘experienced little or no peace dividend after the Agreement, and poverty and deprivation linked to educational under-achievement and high unemployment affects both nationalist and loyalist areas alike’ in Northern Ireland.
  • There is an acute lack of social and economic opportunities; 120,000 children are living in poverty, and more than 40,000 people remain on the social housing waiting list. Between 1998 and 2014 suicides were on rise.
  • The localities most deprived during the pre-Agreement communal riots remain the most affected areas within Northern Ireland today.

Brexit, a stress test

  • Britain’s break from the European Union (Brexit) was always going to prove a major stress test for Northern Ireland because 56% of its electorate voted to remain in the European Union.
  •  The specific protocol concerning Northern Ireland, which ‘provided for the territory to remain in the customs union and single market of the European Union while protecting its status as part of the United Kingdom’ is causing the present trouble.
  •  Irish Protestant loyalists argue that the deal puts the union at risk. The unionist party ‘campaigned for Brexit on the basis that a United Kingdom outside the European Union would make a future united Ireland much more difficult to achieve.
  •  the Irish Catholic nationalists are talking up the prospects of achieving an early united Ireland and demanding a vote on it, which instils acute anxiety among the union loyalists.
  • In short, ‘Brexit has encouraged a strong revival of identity polarisation, and a possible Irish Language Act, that would give the Irish tongue equal status to English in Northern Ireland’, is feared by unionists as yet another nail in the United Kingdom’s coffin.
  • Demography has changed since the Good Friday Agreement; though  unionist parties do not  have the majority, but political inertia prefers a vacuum, so progress toward an equable and liveable peace has stalled.
  • The  ‘past traumas continue to weigh heavily on current politics in Northern Ireland and that is unlikely to change as the twin challenges of managing the Protocol and preventing communal violence occupy the attention in that territory.

Scheduled events

  • Elections scheduled next year to the ‘Northern Ireland Assembly will be followed in 2024 by an important vote on the Northern Ireland Protocol because under the terms of the Brexit agreement, the Assembly will have to vote on whether or not to accept the continuing operation of the Protocol.
  • If  unionists decide to boycott this vote, the legitimacy of the Protocol will be thrown open to question.
  •  Scottish referendum on independence likely to be held around 2024 may well further destabilise Northern Ireland’s fragile politics.

Lessons for India

  • Peace is an extraordinarily brittle entity, and any functioning democracy must ensure a daily commitment to addressing communal issues with vigilance, tolerance and compromise. These are lessons to be drawn in India.
  • The recent violence in Northern Ireland shows that every country needs leadership that takes responsibility for peoples’ social and economic problems and steers prejudices away from entrenched phobias.
  • The ruling party in India needs to be aware that creating religious tensions between communities has incalculable deep-seated negative consequences that will severely damage every section of society and all our established political and national institutions.


  •  Mutual fear, esteem and consent, of  Irish people is never addressed and artificial differences are played up by political elements wishing to stoke communal sentiments and keep both communities at the mercy of irresponsible and divisive forces.
  • While the British, Irish and American governments have condemned the violence, there is a lack of local political leadership to stabilise this volatile situation.


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