Decoding Slowdown: Despite recapitalisation, PSBs are high in NPAs and low in lending
Gross NPAs of the PSBs stood at Rs 8.06 lakh crore on March 31, 2019, even after a sum of Rs 3.12 lakh crore was written off between FY15 and FY18; credit growth was a mere 9.6% as against 13.2% for the SCBs
- Aug 30, 2019,
- Updated Sep 23, 2019 4:41 PM IST
Higher investment is billed as "the key" to reviving India's economy which is reeling under a slow down. But the central government's revenues have fallen from 10.1% of the GDP in 2010-11 to 8.2% in 2018-19 and its expenditure from 15.4% of the GDP to 12.2% during the same period. The private sector is battling with low industrial production and capacity utilisation and has, therefore, no need for fresh investments.
The banks, particularly the public sector banks (PSBs), have their own sets of problems with non-performing assets (NPAs) impeding credit outflows. That is why the central government has been recapitalising the PSBs since 2014-15 (FY15) and continues to do so but there are little signs of improvement.
Higher investment is billed as "the key" to reviving India's economy which is reeling under a slow down. But the central government's revenues have fallen from 10.1% of the GDP in 2010-11 to 8.2% in 2018-19 and its expenditure from 15.4% of the GDP to 12.2% during the same period. The private sector is battling with low industrial production and capacity utilisation and has, therefore, no need for fresh investments.
The banks, particularly the public sector banks (PSBs), have their own sets of problems with non-performing assets (NPAs) impeding credit outflows. That is why the central government has been recapitalising the PSBs since 2014-15 (FY15) and continues to do so but there are little signs of improvement.