Top court said the centre's affidavit on waiving "interest on interest" on loans was not satisfactory.
The government has informed the Supreme Court that "it's not possible to give more relief to various sectors" amid the novel coronavirus pandemic, stressing that "courts should not interfere in fiscal policy".
In its latest affidavit, the government has said: "Policy is the domain of the government and court should not go into sector-specific financial relief. Any further relief, besides waiving of compound interest for loans up to Rs 2 crore, is detrimental to the national economy and banking sector."
Last week, the government told the top court that it was ready to waive interest on the repayment of loans of up to Rs 2 crore, frozen by the Reserve Bank of India (RBI) in a six-month moratorium granted because of the coronavirus pandemic.
On Monday, however, the top court said the centre's affidavit on waiving "interest on interest" on loans was not satisfactory and asked for a do-over in a week.
While hearing petitions on a waiver of interest on deferred EMIs - or interest on interest - to help small borrowers during the coronavirus pandemic, the top court said the centre's affidavit "fails to deal with several issues raised by petitioners". The government was asked to consider the concerns of the real estate and power producers in fresh affidavits.