There are two ways to assess the government’s decision to decriminalise dishonour of cheques. One is that businesses in a sagging economy need all the help they can get, and that through this decision such help has been extended to ensure that failure to honour cheques will not lead to criminal prosecution.

The other, of course, is that such a step may encourage unscrupulous businesses to back out of their commitments. According to the Confederation of All India Traders, 20 per cent of pending cases relate to dishonour of cheques under Section 138 of the Negotiable Instruments Act, 1881, and this reveals the size of the problem. Of course, it is also a fact that some of these cases are frivolous in nature, where unscrupulous creditors persist with prosecution even after reaching settlements.

The short point is that the absence of punitive action under Section 138 is a double-edged proposition and the Union Finance minister would do well to subject the matter to scrutiny. Overall, though, it is another of the measures announced by the government that has not quite pushed the economy out of its despair.

The other initiative that has evoked a sluggish response is the Government’s Emergency Credit Line Guarantee Scheme, which was tweaked just a couple of days ago by a doubling of the upper ceiling and by including individual loans given to professionals.

The reasons for this sluggishness are not far to find. First, notwithstanding the extension of the Government’s guarantee, bankers are so reluctant to bestir themselves that the Finance Minister was forced last week to ask MSMEs to report recalcitrance to her, a fond wish that may never be fulfilled.

The second is that the scheme covers only existing bank borrowers and does not extend to those who had not availed bank loans when the coronavirus epidemic struck but now find it difficult to operate their businesses without infusion of funds.

Notwithstanding the availability of sufficient collateral, bankers have dragged their feet over such loan requests. Indeed, it has become routine for several public sector banks, which ought to have taken the lead in bringing the Finance Minister’s plans to fruition, to say they are so busy with their mergers that they do not have time to process loan applications.

To this sorry situation may be added the delays caused by frequent bank closures due to lockdown measures announced by states. Overall, India seems to lack the will or the desire to pull itself out of the economic mess it finds itself in. Unless the Finance Minister makes it possible to unshackle herself from the bureaucracy and take drastic steps to ensure that businesses access the liquidity they need, many will be doomed.

While the epidemic is not of her making, dealing with its consequences may well define her stewardship.