Economic sense, anyone?

These are dire times, with politics and the economy clashing head-on. Jobs are going, as are savings — so much so that Indians are even changing eating habits

- RAJEEV NARAYAN

“If you owe ten pounds to the Bank of England, you get thrown in jail, but if you owe a million pounds, they invite you to sit on the Board.” - Philippe Riès

This is a terminal time for India, with politics and the economy moving head-on at one another, especially as Year 2024 and the General Elections inch ever closer. Hundreds of election rallies are being planned across the nation in the run-up to the grand electoral fest, with everything else including the flailing economy, rising prices and unemployment is being shoved onto the proverbial back-seat. As people dip into their savings or reach out to banks for sustenance and succour, defaults and NonPerforming Assets (NPAs) at Indian banks are skyrocketing too. Ironically, while smaller loans of regular folks like you and I are coughed up somehow or the other, bigger Corporate defaults have a delectable way of getting off as write-offs of hundreds, sometimes thousands of crores of rupees happen.

The echoes of the banking danger bells resounding in the United States are reverberating in India as well. With two leading banks—Silicon Valley Bank and Signature Bank— almost downing shutters in the US, India is worried too, with the Reserve Bank of India now issuing urgent warnings to all Indian banks, asking them to keep a close eye on their balance sheets and NPA figures. The saving grace in India is that the US banking imbroglio is unlikely to have any real impact here as over 70 per cent of loans have been extended by Indian banks to small loantakers and large Corporate houses account for the rest.

Very tough targets