Finance Minister Nirmala Sitharaman presents the White Paper on the Indian Economy within the Lok Sabha on Thursday.
In September 2013, the gross NPA ratio, together with restructured loans, climbed to 12.3 per cent “largely because of political interference by the UPA government”
The banking sector was going through a disaster round 2014 when the Modi authorities got here into energy. According to the White Paper on the Indian Economy tabled by Finance Minister Nirmala Sitharaman within the Lok Sabha on February 8, when the Vajpayee-led NDA authorities left workplace in 2004, gross non-performing belongings stood at 7.8 per cent. In September 2013, this ratio, together with restructured loans, had climbed to 12.3 per cent “largely because of political interference by the UPA government”.
“The banking crisis was one of the most important and infamous legacies of the UPA government. When the Vajpayee-led NDA government took office, the Gross non-performing assets ratio in public sector banks was 16 per cent, and when they left office, it was 7.8 per cent. In September 2013, this ratio, including restructured loans, had climbed to 12.3 per cent largely because of political interference by the UPA government in the commercial lending decisions of public sector banks. Worse, even that high percentage of bad debts was an underestimate,” in response to the ‘White Paper on the Indian Economy’.
According to the doc, gross advances by public sector banks had been solely Rs 6.6 lakh crore in March 2004. In March 2012, it surged to Rs 39 lakh crore. “Further, not all problem loans were recognised. There was much under the hood.”
The White Paper additionally stated cited a Credit Suisse report revealed in March 2014, which stated that the highest-200 corporations with an curiosity protection ratio of lower than one owed about Rs 8.6 lakh crore to banks. “Nearly 44 per cent of those loans (Rs 3.8 lakh crore) were yet to be recognised as problem assets. That alone would have added another 6.7 per cent to the GNPA ratio,” it stated.
On NPA, the white paper additionally cited a former RBI Governor who in 2018, in a written response to a Parliamentary Panel, acknowledged, “a larger number of the bad loans were originated in the period 2006-2008.”
There was “a mountain of bad loans, a high fiscal deficit despite much of it being hidden, a high current account deficit, double-digit inflation for five years which hit the pockets of many Indians and membership of the club of “Fragile Five” in 2013″.
