The moratorium period on repayment of loans during the Covid-19 pandemic is extendable by two years and several steps have been taken to help the stressed sectors, the government and the Reserve Bank of India (RBI) have told the Supreme Court. A bench headed by Justice Ashok Bhushan was informed by Solicitor General Tushar Mehta, appearing for the union government and RBI, that the economy contracted by nearly 24% in the April-June quarter due to coronavirus-related lockdown and restrictions. “There are stressed sectors and national economy has contracted by 23%,” PTI quoted Mehta as saying.

India’s economy has suffered its worst slump on record in April-June, with the gross domestic product (GDP) contracting by 23.9% as the coronavirus-related lockdowns weighed on the already-declining consumer demand and investment. The GDP contraction in the world’s fifth-largest economy compared with 3.1% growth in the preceding January-March quarter and 5.2% expansion in the same period a year back, according to official data.