My view about NPA and not to extend debate There s a spur in economic activity or sudden surge in Economy all over the world from 2005 till 2008 due to increased incomes in IT sector and this has bought demand in all sectors which is fueled by Real Estate. When RE sector grows the demand for consumables in that sector will grow and to catch future demand corporates invested in cement steel power and govt too increased spending in infrastructure building 4 laned highways which started from 1998 in public funded and then slowly in 2005-2008 under BOT scheme. When GE collapsed due to threshold levels the corporates which invested heavily and fall in demand slowly went bankrupt from 2010 which were not recognised in books of banks and FIs till 2017 to show that everything is on track by both Govt as well as banks to retain rating. The...
more... crisis started worsening and to set things right RBI supported by Govt started to clean balance sheets of Banks from prevent sudden fall of colapse to Zero though it's a pain from 2017 and NPA recognised as a result the GDP started to decrease from 2014-15 from 8% to low of 4% in 2019-20 though sustained above 6% for 3 yrs. Banks have stopped lending from the past 5yrs. Now again the upcycle is slowly starting from -ve from July 2020 to drive growth intrest rates were decreased. No doubt we are in this stage because of Dr Manmohan but he was not given free hand to clean at the right time and this Govt has given to present FM. I saw an interview this weekend where she is firm that the govt has given enough of freebees or easy money to citizens as well as industry and asked to increased lending and No SOPs from Govt. There is an English saying Rome is not build in a day. Economy is ongoing cycle unlike political cycle and we as an educated should not go by verbal abuses by parties on each other.