While it is healthy to ask questions in a democracy, any sort of queries are discouraged by the Narendra Modi government. There is complete silence when the government is asked questions on issues like economics, GDP, trade deficits, manufacturing slowdown or even rising fuel prices, but the truth cannot be hidden from the public for long. The façade of silence doesn’t work. But certain numbers have definitely gone up since the last four years. This includes the amount spent on advertisements and PMO’s flight bills. Worst of all is the rising amount of bad loans.
The month of February came as a major blow to the banking sector that exposed a scam of Rs 22,000cr. The Q4 2018 stats for the banking sector now reveals that four Public Sector Banks (PSBs) have reported a net loss of Rs 11,729 crore due to a jump in bad loans. Bad loans are loans wherein the repayments are not being made as agreed between the lender and the borrower. Bad loans get converted into Non-Performing Assets (NPAs) when it fails to generate an income for the lender. An amount as huge as Rs 11,729 crore, and that too just from four PSBs, is worrisome.
The effect of increasing NPAs can be catastrophic. With such huge amount of losses, money available for further lending is in short supply. The losses of banks are then recovered with higher interest rates. This affects both individual borrowers and small businesses that seek to borrow from the banks, who become reluctant to lend due to losses incurred in the past. An important angle to this rising NPAs is that this number was underreported earlier which basically means that a number of existing bad loans weren’t recognized earlier. The reporting happened only post the Nirav Modi scam when the government woke up and tightened the rules around loans.
A gloomy cloud looms over the Indian economy without any sign of a rainbow. The government involves itself more in hate mongering and diverting attention from core issues than in governing the country efficiently. The result of such practices is more than clear. Four years have elapsed under the BJP government, but there is not one indicator that can vouch for the positive impact of their policies.