ON TV

 

https://www.youtube.com/watch?v=En6ADwY01YE

 20th August on ETNow

https://www.timesnownews.com/videos/et-now/shows/stage-set-for-fireworks-at-gst-council-meet-india-development-debate/72404

 27th August on ETnow

https://www.cnbctv18.com/economy/covid-19-impact-indias-q1fy21-gdp-shrinks-by-nearly-a-quarter-at-239-6785091.htm

CNBC 31st August 2020

Govt can make a difference by altering its stance on fiscal policy: Indian Express 4th September 2020

 The first-quarter GDP growth number was on expected lines, but given the gaps in the availability of data for April and May, conjecturing the exact number was guesswork. A fall of (-) 20 per cent looked likely and though the number is a bit higher, it does not change the conclusion that the economy has slumped sharply due to the lockdown.

The contraction observed in seven of the eight sectors reflects how deep the problem is. Public administration was expected to grow at a positive rate given that the fiscal deficit was much higher in the first quarter of the current year relative to last year (83.2 per cent against 61.4 per cent). This did not happen, and the reason is quite straightforward — higher government spending was in the form of transfer payments rather than spending on goods and services, which resulted in a negative growth number. The other sectors — manufacturing and services — have been in the negative zone across the board, which again is quite expected.

Growth for the full year is likely to be in the region of (-) 6.4 per cent, which is premised on a low negative growth number for the first two quarters for certain, possibly a close to positive number in the third quarter and positive growth in the last quarter. This assumes that around three-fourths of the economy would be able to operate at a capacity utilisation rate of 65-70 per cent. The balance of 25 per cent of the economy, which would be in the services category, would probably still be struggling in the fourth quarter. Based on the first-quarter performance, these scenarios remain unchanged.

Two basic factors would influence the assumptions being made on the growth prospects for the coming quarters. The first is the process of “Unlocking”. It has been observed that with the economy moving from the stage of a total lockdown in April to a gradual opening up of the windows in May and June, and then the door opening up a little more significantly in July and August, the movement from one stage to another did reflect in the macro-economic numbers. For instance, though the PMI number for manufacturing remained in the negative terrain — being less than 50 for the first four months of the current year — it crossed the 50 mark in August. Therefore, there has been an improvement on a month-on-month basis. The same holds for the index of industrial production (IIP), which though negative in the first three months, has witnessed less intensity: From (-) 57.6 per cent in April to (-) 33.9 per cent in May and then (-) 16.6 per cent in June. This is in line with the opening up of activities across the country.

While it is reasonable to assume that the “Unlock” process will be positive for the economic sectors, there is no assurance that there will not be localised lockdowns, as the course of the pandemic is unknown. The Centre has made strong statements on this issue, but the states could end up taking specific decisions. This affects economic activity as supply chains, which span the entire country, get impacted sharply. Also, business units are not confident about starting or expanding their business.

For services, the issue is clear. Most services involve social interaction and thus following distancing norms is always going to be a challenge. Hence, completely opening up services like hotels, transport (airlines and railways), tourism, and entertainment would be low on the list of opening up and thus recovery of output in these areas would be sluggish.

In real estate, which is an integral part of the services segment, there are multiple sets of challenges — one of which is “real”, while the other is a change in the mindset. For construction activity to begin, there need to be projects and labour on the supply side, and demand. The present stress on home loans can hinder a revival in residential real estate. The work-from-home ethic has caught on. The thinking today is that this can be a trend in the future and will affect demand for property and leases. Putting these factors together, the revival of the services sector would be prolonged as compared to manufacturing.

Opinion | Covid-19 shock and inadequate policy responses have compounded India’s economic problems

The second factor which will play a role in the economy’s growth prospects in the coming months is the possibility of a revival package from the government. There have been some hints given by officials that something could be on the cards. This can be a course changer for the growth trajectory. So far, support from the government has been more through the indirect route, where food relief for the poor has been combined with more aggressive lending by the financial system with guarantees in different forms. To boost growth presently, there should ideally be some additional capital expenditure by the government which goes beyond what has been provided in the budget. This seems to be the logical solution as the first quarter GDP numbers show a decline in both consumption and investment. By increasing capex, the government can begin a virtuous cycle of creating assets as well as providing employment. This will create a dual impact on the economy.

Overall, economic growth would be in the negative terrain in the near future, though the pace of the decline will ease. This will be contingent on how soon the unlocking process reaches the state where the pre-COVID situation is restored. Reaching the same threshold looks unlikely given the spread of the virus and moving to the positive growth zone may be possible only in the fourth quarter. There is definitely a possibility of the (-) 6.4 per cent number being revised further downwards depending on the evolving conditions. But the government can certainly make a difference by altering its stance on fiscal policy, going in for some pump-priming. It may not be too late even now.

Can anything be done to save the economy? Free Press Journal 2nd September 2020

 The negative growth number in the GDP was expected and hence this was not really a surprise. But it does raise a broader question on whether anything can be done to turn the tide. The second quarter is also probably going to witness a similar de-growth, though the intensity will be lower. As things stand today, the economy is just waiting for the monthly unlock guidelines, which opens the door, albeit in a limited manner. This is understandable, since the infection cases have not yet peaked and the likelihood of their increasing further looks real. In such a situation, can anything be done?

The answer is that the onus is on the government to do something different. The private sector is just not able to provide any support for the growth process for several reasons. First, there is excess capacity in industry, as demand has slumped and hence there is no need to invest more. Second, infrastructure activity has virtually come to a standstill and only and unless a push is given can the private sector play its role. Third, the private sector, especially the SMEs, are already at the corner when it comes to repaying banks, and the end of the moratorium means that there will be more caution shown when borrowing from banks. Fourth, the banks and NBFCs, on their part, are less willing to lend to industry at this point of time, as evidenced by the surplus funds being deployed in the reverse repo auctions.

There is hope that there will be a revival in consumer demand. This too has limitations. First, several people have lost their jobs already, due to the lockdown. Second, there have been pay cuts across the board, which means that willingness to spend is low. This has already created problems for the leveraged households, as servicing bank loans is getting tougher. Therefore, while the ‘pent-up demand’ theory may work to an extent during the festival time, it cannot be anywhere close to what is normally witnessed. The expectation of rural demand to revive is palpable, given the good monsoon, but it would be necessary for price realisation to be commensurate with the output. In the past, higher kharif output has led to prices falling. Besides, in these uncertain times, the rural folk may prefer to save in gold, rather than spend. At any rate, it cannot drive growth of the economy and at best, can sustain rural demand.

Under these circumstances, there is a call for the government to do something special. So far, the government has played the role of enabler of growth and created conducive policies for the private sector to operate. In the economic relief package, barring the food relief given, the rest was driven through the financial system, with the government’s role being restricted to a certain quantum of guarantees to SME and NBFC loans. While this has been beneficial for sure, it has not added to demand, which is lacking in the economy. The option is to go in for some extraordinary spending, by expanding the fiscal deficit.

Intuitively, it can be seen that in case the government spends Rs 1 lakh crore, that would be around 0.5 per cent of the GDP, which can add to overall spending. Ideally a sum of Rs 2 lakh crore, which is 1 per cent of the GDP, should be ploughed in immediately on projects. The government has spent on the NRGA programme, but this would be more in the nature of transfer payment, where there is no concrete GDP added. This is one of the reasons why the contribution of the government sector in the GVA for Q1-FY21 had shown a decline of 10.3 per cent even as fiscal deficit mounted. The spending must be real.

The advantage of government capex is that it creates a virtuous circle. First, spending on roads, railways, power projects, urban development creates demand for cement, steel and so on. These industries get a heads-up, straightaway. Second, all these projects require more labour, which leads to job creation. Third, the second order effects work out as the steel and cement companies increase their demand for related raw materials and hence complete this virtuous link. All this while, the household consumption increases, as jobs created offer income to be spent.

Therefore, the government needs to go in for a shift in ideology on the fiscal deficit. Presently, it is conservative in terms of sticking to the FRBM path. This must change. The fiscal deficit for the year has been put at 3.5 per cent for FY21 and going by only the revenue slippages,would end up at 7-8 per cent of GDP. This is the time when the entire world is going in for more aggressive fiscal action, which also includes cash payments to households to stimulate demand. Pushing the envelope by another one per cent of the GDP may not really do harm and will be acceptable even on global discussion tables, as this is the norm in the present context. More importantly, this is the only feasible way out.

GDP data: No surprises here; need different policy measures to stem the rot: Buisness Stanadrd 31st August 2020

 The GDP growth number for the April-June 2020 quarter the fiscal year 2020-21 (Q1FY21) was expected to be dismal and the estimates varied from 15-30 per cent. The contraction of 23.9 per cent during this period is a clear reflection of the slowdown caused by the shutdown in March 2020, which was virtually total in April and opened only gradually in the subsequent two months.

The only sector to show growth is agriculture, while the government sector disappointed with public admin de-growing by 10.3 per cent. Agriculture has been relatively immune to the lockdown and it is only post July when there has been more movement permitted across states that the Covid-19 infection has spread, albeit marginally. Therefore, it has been business as usual for this sector and with the Rabi harvest coming in has registered growth of 3.4 per cent.

The government accounts till June 2020 do reveal that revenue expenditure has been aggressive, especially covering the relief to the poor and NREGA programmes that gets reflected here. However, it is unfortunate that running a high fiscal deficit for the first quarter has not resulted in value accretion for GDP. This is something that the government needs to look at.

The other sectors have been in the negative zone, especially services, which have trailed due to the lockdown and the limited ability to operate in several states. Industrial activity comprising mining, manufacturing and power have all moved into the negative growth territory with the inter-linkages being distinct. Lower growth in manufacturing due to the lockdown and supply disruptions has lowered demand for electricity that gained more from residential consumption, and which, in turn, affected demand for coal and hence the mining sector. Construction was impacted by both the issue of stoppage of projects as well as migration of labour. This will get further constrained due to the seasonal factor of monsoon in the second quarter.

On the expenditure side, quite expectedly again, both the consumption and investment stories read alike. The lockdown went with job losses and salary cuts that affected consumption, which also gets reflected in these lower numbers. Also, the investment rate as denoted by the gross fixed capital formation (GFCF) number was down to 19.5 per cent from 28.9 per cent – one of the lowest witnessed in the last decade. Quite clearly, the lockdown impacted investment activity as it was physically not possible to continue with projects which came to an end – both public works and residential construction. Also, private investment was constricted with the lack of demand which did not provide an incentive to invest.

Looking ahead, the picture continues to be gloomy, with the caveat that the negative numbers will look better in the coming quarters. For the year, GDP contraction would be in the region of around 6.5 per cent, provided the Unlock programme gets smoother. The centre appears cognizant of the disruptions caused by localised lockdowns and has taken some action in this regard. With the unlock progressing without a major hitch, one may expect growth possibly in Q4 with the others witnessing progressively better negative growth rates.

There are expectations that the rural demand story plays out in Q3FY21 when the festival season starts and the Kharif harvest comes in. Presently, indications are that crop sowing is progressing well and output would be good. The crux is in farmers realising better prices and hence income. This must work out well as this is one factor India Inc is banking on as well. Also, the government action on extension of food relief or any additional stimulus will be awaited to turnaround this number.

Saving India’s Banks: Creating a framework for restructuring bank loans: Financial Express 29th August 2020

 Restructuring of loans is always a debatable issue as it runs the risk of adverse selection. In this game, both the bank and the borrower are comfortable with the concept. The borrower gets extensions in various forms while the banker can defer recognition of the non-performing asset, save on provisioning and, hence, capital. The government too is happy with this solution as the NPA levels are lower and India Inc is not complaining. It is a pareto-optimal situation. But, the critic’s view is that such actions only kick the can down the road, as restructuring allows us to run away from the obvious. It is just deferring the problem as money not paid is default, whichever way one looks at it.

There is evidently a perverse incentive to go for such restructuring, so there is a need for objectivity in selection. Normally, such decisions are taken by the lenders, and the majority-rule among them becomes the overriding factor. In the present situation of several companies and industries being affected by the shutdown, objectivity should be used to select the candidates. While the current crisis calls for universal restructuring, it should be consciously done, by separating the companies which have been hit by the pandemic and its fallout from those which were not doing well, yet require assistance as they have been pushed further back. The ones which were non-performing prior to the lockdown also require legitimate support as they can turn the corner if restructuring is done judiciously.

Some of the following parameters can be used for separating this chaff. First, a cut-off date for companies which were standard assets on the books of banks that turned negative due to the lockdown can be decided. This is something already included in the RBI policies, where March 1 can be used as the threshold. If companies were not performing at this point, they would go into category B, which can then have differential solutions.

Second, companies which have taken the moratorium in March should get precedence as these assets were recognised as being under pressure right from the beginning. Hence, in terms of hierarchy, additional weight can be given here.

Third, the financial performance in Q1 of the present year must be evaluated in terms of sales and expenditure growth besides interest cover ratio and profitability. This will reflect how much the company has been impacted in this quarter over the last five quarters. Comparisons with the Q1 and Q4 quarters of FY20 would be important. Here, most companies will qualify as the results have been dismal for most sectors.

Fourth, industries need to be segregated based on different operational levels as of a cut-off date, which can be either June or September. Some like pharma, FMCG and IT were working even during April, albeit to a limited extent, and those like hospitality, tourism, entertainment are virtual non-starters even today. By such categorisation into industries that have been ‘most’,’ moderately’ and ‘less’ affected by the shutdown, a stepdown view becomes possible.

Fifth, the prospects of the industries need to be independently worked out, probably by credit-rating agencies as their view is unbiased. This will help to put companies in various buckets of time taken to reach normalcy. The advantage here is that the tenure for restructuring can be ascertained. For example, if independent research shows that real estate will revive in March 2021, while entertainment only in October 2021, the loan restructuring can be differentiated. The time would not be uniform for all industries as is being done for SMEs. Having a uniform time for this exercise could give benefits for extended periods.

Sixth, loans that must be restructured can be bracketed into categories based on the interest cover ratio across different size groups of credit. The restructuring exercise would involve changing the tenure for repayment as well as changes in the interest rate. The banks must be involved as this affects their commercial profitability. The tenure and interest rate can be linked to the size of the loan. A different norm can be set for smaller size loans.

Seventh, the restructuring package would have to be made conditional. These would have to be in terms of curbs on dividend payment, pay packages of the management, operational expenses like travel, etc. Also, commitments to trade creditors would have to be adhered to. This is essential as all companies would like to go in for such an exercise, especially if the tenure is extended and interest is lowered. The conditions would restrict the free-riders.

Eight, any restructuring of loans of a company would also entail sanctioning of fresh loans as the former only repackages the loans which help companies survive. But, for growth, fresh loans will have to be advanced to ensure that the company is back on the growth path. The extent to which fresh loans can be given can be linked with the fourth factor.

Nine, to make the new credit feasible for banks and viable for the borrowers, the government must provide a credit guarantee in an analogous manner, as has been done for the SMEs. This can again be sector-specific for well-defined time periods. This will protect banks in the future and can be done selectively.
Last, the restructuring of loans will evidently mean a loss for banks as any loan that is not serviced on time involves a cost. It is a zero-sum game. The government would have to contribute, with interest subvention targeted at sectors where the exercise involves lowering of interest rates by more than 200 bps. This cost should be shared between the two.

Having an objective approach, which is driven by formula rather than subjective judgments of the lenders would make the exercise more transparent. The first five parameters mentioned could be used to derive the formula, while others would form the structure of such deals. A system which allows for subjective judgments carries with it the disadvantages that go with ‘groupthink’, where all merely agree because others do. The principled approach will be more targeted, as the more vulnerable sectors could get more liberal terms. Also, as stated earlier, restructuring on the grounds of Covid-impact holds for both the standard and impaired assets at the cut-off point. Both require attention. The formula-driven process will clearly define the perimeter of allowances to be made.

Hence, based on the ten parameters stated here, a weighted score can be assigned by running an algorithm to find out which companies qualify for the restructuring plan and the terms therein. There would be less room for subjective judgments here as the terms of engagement are pre-decided. The government also would have an important role to play here by both providing a guarantee selectively as well as providing for an interest subvention so that banks do not have to bear the entire cost.

Farmers need ‘options’ on futures trading: Businessline 23rd August 2020

 

NCDEX contracts allow farmers to opt out of a futures deal. Seamless movement to spot exchanges should become possible

Futures trading in agricultural commodities was always at a disadvantage when it came to reaching out to farmers. The reason is straightforward. A farmer can sell the crop in advance at a known price on the exchange but if the price on the day of sale is higher, he cannot go back on the contract. An option gives the seller this right; but once it was allowed on the ‘futures price’, it became complicated for the farmer to comprehend. Therefore, the idea of getting in ‘options on goods’ which is not on the futures but the spot price makes a lot of sense and shortens the distance, as it were, between the farmer and the exchange.

NCDEX has launched three contracts, which is noteworthy. There is no reason why farmers should not go in for such trading as it is the same as the MSP (Minimum Support Price) with a small difference. On the positive side, the farmer can sell at a known futures price and in case the spot price on the day of settlement is higher, he need not go with the trade. This will eventually hold for all crops even where the MSP is ineffective. The downside is the loss of the option premium. These options can be made available across all commodities and geographies and have the potential to change the landscape of agricultural marketing.

NCDEX, a commodity futures exchange has a spot exchange, NCDEX e-Markets Ltd; together, these can offer integrated solutions for the farmer. Basically, the options transaction will protect the farmer against the downside like the futures price. However, if the spot price is higher on the settlement date, the farmer need not go ahead with the contract and should be allowed to seamlessly switch to the e-market platform and sell the product. The two exchanges should ideally connect the platforms for the farmer so that the optimal price is received. This is just what the farmer would want — the best of both the worlds.

Logistics support

The establishment of such contracts must be supported at the back-end by logistics which includes transport, storage, grading, assaying and packing. This will provide an end-to-end solution for the farmers. Simultaneously, the contract specifications must be aligned to the farmers’ output and while NCDEX starts with 10 MT as the specification, should ideally be of a lower quantity to involve class participation.

To make this successful, there must be an expansion of the delivery centres with all the infrastructure facilities to enable trading. Also, trading terminals must be made available in all connected geographies for participation to increase. Mass education is required which must be not just through lecture series which is the norm but by having trading facilities in the villages.

The brokering community can take a lead here and needs to be incentivised to do so. Having terminals in all the major towns around the delivery centre can have lower transaction charges to begin with.

The model looks good but the challenge of getting the farmer to use these platforms remains. Ideally, the top 10-20 trading centres in the top five producing States of wheat should have delivery centres as well as trading facilities. While the latter is easier to achieve, the former is not. For such a plan to work out, it is necessary for the State governments as well as WDRA (Warehousing Development and Regulatory Authority) to get involved because creating infrastructure can never be the job of a commodity exchange which is barely able to meet its commercial viability parameters given the complex nature of agriculture.

Governments — both Central and State — need to be geared to this reality because if they can create these structures, the financial commitments in the form of subsides can be brought down significantly over time as the market provides the best deals to the farmers.

The government has been proactive in terms of revoking the APMC laws and allowing farmers to sell across boundaries. But this will be ineffective unless access is provided, and hence even for the concept of e-Nam to work, such connectivity is necessary. The onus is quite clearly on States to make the ‘options on goods’ concept to work or else it can become another wasted exercise. Corporates should have free access to buy these goods on the platforms of commodity exchanges which will cut down on intermediation costs.

In fact, if the options on goods concept works out well, the government can reconsider the MSP and procurement concepts. Farmers could just be getting a higher price on the exchange and may not require such continued support.

The government could also become a buyer on the exchange platform to meet its buffer stocking norms. Such a market will allow for procurement across all States and not get restricted to those centres where the FCI operates.

There can be no argument against the commercialisation of agriculture. Given the strength in terms of production, India can be a major exporter of farm products. For this to happen we need to strengthen the links between production and sale; the present initiative of SEBI to let the exchanges launch options on goods is significant as it also closes on the other end involving sale.

The logistics chain is the weak link which must be developed through state action. This will require investment and incentives to set up warehouses and grading and assaying facilities. It will lead to creation of several jobs in rural India which is missing today and ensure that migration is curbed.

The government will also gain as the need to subsidise will come down and the process of procurement and storage of surplus grains is checked.

Hence, options on goods should be extended to all farm commodities as the potential to create this virtuous circle is huge. But for this to happen, state support is required right from the Centre to the panchayats. Given the ‘will’ seen today at these levels, it does look achievable.

What the India Inc salary cuts could mean; Financial Express 22nd August

 The Q1FY21 results of the corporate sector were always going to be of interest. That’s not just because of declining sales and profits, which can hold for most sectors that were not allowed to function at an optimal level, but also because of how the salary bill moved. Ever since the lockdown announcement, several companies decided to go in for cost rationalisation, and the staffing component was the first casualty.

The logic was that, as there was no or limited production of goods and services for an indefinite period, there was no reason to foot the full salary bill. Further, as companies were not sure about when these bans would be lifted, they had to suspend operations and could not bear this cost. At the lower level, comprising unorganised labour, the lockdown meant that the migrant population was on the road. For those in the organised sector, different measures were used to lower the salary cost.

First, the headcount was reduced depending on the estimates made internally on what should be the optimal level of staff for the year. Those in the services industry, which involved social interaction, were the most-affected as the first strains were witnessed even before the lockdown was formally introduced. Airlines industry, for example, had cut down on the salaries of their staff even before the lockdown. Second, there was a systematic reduction in the salaries of employees, and various modalities were used. There were no pay-cuts for those at the lower level—Rs 5 lakh per annum or lower. But, as one moved upwards in the echelon, salary-cuts in the range of 5-30% were invoked. Third, knowing very well that the company would not be doing well, increments were held back or annulled for the year. Besides, as Q4FY20 and full-year FY20 results showed, most companies were in the red, with declining top line and profits; so, there was a reason not to give increments. Last, with a bit of accounting flexibility, the variable portion of the salaries of staff was cut on account of company performance.

In the corporate world, a substantial part of the salary is often in the form of variable pay, which is linked to the company’s functioning. Those responsible for sales targets tend to have a higher proportion of their salary in this form. For the others, the parameter is often the overall performance of the company. This is a discretionary part of the salary, and, hence, can be tweaked to lower total salary outflow. A combination of zero or lower increments and sharp cuts in the variable pay can reduce the cost outflow on employees.

The FY21 first-quarter results reflect all these aspects to a certain extent. The results announced so far indicate an interesting pattern. While the aggregate salary bill for around 560 companies indicate a growth of 3.7%, from Rs 1.20 lakh crore to Rs 1.25 lakh crore, the pattern across sectors is quite stark. The accompanying table presents the growth in this component in 26 sectors.

It shows that sectors affected by the lockdown for a longer period have also been affected more in terms of rationalisation of staff cost. Also, those sectors which still have not witnessed any major relaxation in their operations, have been pushed back further. Realty, auto, media, hospitality have all been pushed back on this account. Out of these, the service-oriented industries confront the impediment of uncertainty. This also means that, going ahead, there could be further cuts, especially in headcount in these sectors. The pattern so far has been that companies first invoke salary cuts, and when operations cannot be resumed or are severely constrained, go in for a reduction in headcount.

On the positive side, the industries which witnessed an increase in the salary bill were banking, IT, healthcare, agro-based. These continued to do well as their operations are categorised as essential goods and services. Chemicals and plastics are intermediary goods that go in the production of essential goods. Hence, they also witnessed marginal growth.

A precondition for any revival in employment and restoration of pay packages must be the removal of lockdowns permanently. In fact, the periodic localised lockdowns push many sectors further back and are a concern for companies. Corporations will be better able to draw their production plans, which includes the deployment of labour, if there is a certainty of operations. For instance, theatre-owners being told that opening of theatres with a graded SOP will be allowed from, say, December onwards is far more preferable than having the local government blowing hot and cold over the resumption of such services. Therefore, it is essential to have an exit plan communicated to all production units.

A fall in salary payouts for companies has implications for the banking and NBFC sectors. There has been a tendency in the financial system to move towards the retail segment, to protect against the build-up of adverse asset portfolio post the NPA crisis, which was recognised in 2016. The assumption was that while one big-ticket default in infrastructure can set the bank back significantly, it was less probable that there could be such large scale defaults on the retail front.

However, Covid and the lockdown has changed these dynamics. RBI’s Financial Stability Report highlights the high proportion of retail loans availed of the repayment moratorium; as of April 2020, this was around 55%. Intuitively, borrowers who opted for such a moratorium would be challenged to service their loans when their incomes are part of this large segment of sectors where salary payouts have come down. Therefore, declining salary payouts is a concern for both the reflection of employment growth as well as income sustenance, which affects debt-servicing ability. This is one area which would merit more discussion when the issue of restructuring of loans comes up in this segment.

The picture on the employment front is, hence, quite grim. The organised corporate sector has, per force, reduced salary payouts, and quite sharply. This will impact the future consumption of the concerned households amid uncertainty. Also, for the debt-laden households, meeting debt-servicing commitments post-moratorium will be a major concern.