Reflections

In the previous article – India’s NPA Problem, 2001-2012; we got an overview of the NPA Problem, and could see from the graphs its genesis lay in the high growth period between 2003-2008. As the NPAs started rising from 2008 onwards  they clearly pertain to investment decisions taken in the previous years. Now in any high growth period, some investment calls are going to go bad; if we play too safe – we sacrifice some growth. But, when the same investment decisions turn bad to an extent that Bank Credit to industry dries up, it becomes a serious issue that needs to be dealt with. WHO IS RESPONSIBLE AS PER CURRENT DISCUSSIONS? There is a tendency by some to blame the UPA Government, and some to blame the NDA Government; as I looked at in the previous article, no one is calling the industry/s to task for failing to judge the environment properly. Is it the contention of the people that 100% of all NPAs were caused by unforeseeable external shocks? There is a strong case in th...