Bad loans fractured the growth of Indian banking sector – Lord Meghnad Desai

“The demonetisation will have a long standing positive effect on the Indian economy, “ said Lord Meghnad Desai during an exclusive interview with Dalal Street Investment Journal. The renowned economist said that this positive and pro-people move will propel the economy and the GDP will soar in the coming few days. Indian economy is passing through a crucial phase and this sort of economic renaissance should be backed by a robust digital skeleton. Digitisation is the future of Indian economy and the digital wave will change the face of the Indian economy in the forthcoming years, assured the India-born British politician. 

Bad loans have been a burden on several PSU banks and NPAs have fractured the growth of several banks in the last few years. It should be handled properly with the help of a proper strategy framed by the Modi-led government, said professor emeritus at the prestigious London School of Economics. The NPAs not only maligned the present banking climate of the country but have also raised questions on the entire banking ecosystem. The lenders have violated rules and these swelling loans have exposed the nexus between politics and business, said Desai. The government must act smartly and take strong measures to untangle this Gordian Knot.  

When asked about the new rules rolled out by the Trump administration, he replied that they are in a learning stage and the US government is understanding the finer details of governance. Things will fall in place as the US is also a part of the massive global family and they have to maintain financial harmony to stay afloat in the global market, he signed off.