4 ms·

It's really not clear what's going on in the Indian state. IL&FS apparently has funded quite a large number of infrastructure projects, which unlike Lehman hav

It's really not clear what's going on in the Indian state. IL&FS apparently has funded quite a large number of infrastructure projects, which unlike Lehman have tangible value. NHAI, the state highways agency is said to owe a great deal of payments to IL&FS (rumoured to be on the order of $ 5 B).

throwawawy42348 8y ago
I'm not sure who the planned intervention is for, but it looks very much like it's for the corporate sectors. The MSME sector, which is touted to employ 92% of India's labour has widely been reported as having taken a very bad hit after the double attack of GST and demonetization. RBI on the other hand is said to favor vulture funds (resembling IMF's 'solution' during the Asian crisis). Then again, the Indian state has let high profile defaulter escape with impunity in the past few years. There are indications that this was done consciously, through PMO/CBI intervention. All in all, I have very little trust in any institution of the Indian state.
- throwawawy42348 8y ago
  Indeed, I suspect demonetization was in part a scheme to replenish the reserves of the state banks.
  - throwawawy42348 8y ago
    ... of course low credit rate means money has a tendency to go into unproductive sectors (ala Japan's Bubble heydays). (I'm glad to see Economist reflect my understanding.)
    - nhauz 8y ago
      Why don't you write all of this in just one post?
  - vijaybritto 8y ago
    I think it was bring back cash and also to win Uttar Pradesh state elections. A 100+ plus people died because of that and not many people cared. Sigh
    - kamaal 8y ago
      >>not many people cared No person in India cares much anybody or anything else. Unless they are directly affected by it. People optimize so much personal good, that bad things happening to others are actually celebrated.
    - beerlord 8y ago
      The Indian population is growing by 1,920 people per hour- so they would have been quickly replaced.
newyankee 8y ago
"The present troubles have their roots in 2005-12, when state banks went on a lending bender, extending credit to dubious tycoons and to infrastructure projects. Net bad debts are 9% of state banks’ loan books. The government has not properly recapitalised these zombies and the flow of credit from them has slowed. Accidents keep happening. In February pnb, the second-biggest state lender, disclosed a $2bn fraud involving diamond merchants." Quote from the article
quantummkv 8y ago
> It's really not clear what's going on in the Indian state. It's crystal clear actually. Decades worth of stupid decisions (or indecision, as many claim) are finally bearing fruit. Unfortunately the current government, the first in many years that is actually taking some decisions to get the ship in working order is gonna get caught in the quicksand created by its predecessors.
- kashif 8y ago
  ha, that is patently untrue, but like your claims mine will also remain unsubstantiated
- wtmt 8y ago
  > Unfortunately the current government, the first in many years that is actually taking some decisions to get the ship in working order is gonna get caught in the quicksand created by its predecessors. Citation (and additional information) required on this part, please.
- kc10 8y ago
  > Unfortunately the current government, the first in many years that is actually taking some decisions to get the ship in working order Well, the current government did its part in letting the tycoons, who took large loans, get out of the country. The currency ban was another stupid mistake (source:https://www.nytimes.com/2018/08/30/world/asia/modi-india-rupee-cash.html https://www.nytimes.com/2018/08/30/world/asia/modi-india-rup...) that led to chaos and people lost trust in the banking system. They don't know if they will easy access to their money in the banks with the cash withdrawal limits and ATM issues. If people lose trust and don't deposit the money, eventually the whole system would collapse.
- eric24234 8y ago
  The BJP(current government) has neither the brains and nor the motivation to develop the country. All they want to do is get the country back to the vedic period(which is nothing but denting the education to the majority of the people).The leader of the party Modi was in the ads(jio) publicly. It was a public announcement by the corporate to the other organizations that they own the government. Also this same government banned the beef. This government is more like trump focusing on religious hatred for votes and nothing more that that(https://en.wikipedia.org/wiki/2002_Gujarat_riots https://en.wikipedia.org/wiki/2002_Gujarat_riots was led by the current leader and prime minister of the party).

throwawawy42348 8y ago

I'm not sure who the planned intervention is for, but it looks very much like it's for the corporate sectors. The MSME sector, which is touted to employ 92% of India's labour has widely been reported as having taken a very bad hit after the double attack of GST and demonetization. RBI on the other hand is said to favor vulture funds (resembling IMF's 'solution' during the Asian crisis). Then again, the Indian state has let high profile defaulter escape with impunity in the past few years. There are indications that this was done consciously, through PMO/CBI intervention. All in all, I have very little trust in any institution of the Indian state.

throwawawy42348 8y ago
Indeed, I suspect demonetization was in part a scheme to replenish the reserves of the state banks.
- throwawawy42348 8y ago
  ... of course low credit rate means money has a tendency to go into unproductive sectors (ala Japan's Bubble heydays). (I'm glad to see Economist reflect my understanding.)
  - nhauz 8y ago
    Why don't you write all of this in just one post?
- vijaybritto 8y ago
  I think it was bring back cash and also to win Uttar Pradesh state elections. A 100+ plus people died because of that and not many people cared. Sigh
  - kamaal 8y ago
    >>not many people cared No person in India cares much anybody or anything else. Unless they are directly affected by it. People optimize so much personal good, that bad things happening to others are actually celebrated.
  - beerlord 8y ago
    The Indian population is growing by 1,920 people per hour- so they would have been quickly replaced.

newyankee 8y ago

"The present troubles have their roots in 2005-12, when state banks went on a lending bender, extending credit to dubious tycoons and to infrastructure projects. Net bad debts are 9% of state banks’ loan books. The government has not properly recapitalised these zombies and the flow of credit from them has slowed. Accidents keep happening. In February pnb, the second-biggest state lender, disclosed a $2bn fraud involving diamond merchants." Quote from the article

quantummkv 8y ago

> It's really not clear what's going on in the Indian state. It's crystal clear actually. Decades worth of stupid decisions (or indecision, as many claim) are finally bearing fruit. Unfortunately the current government, the first in many years that is actually taking some decisions to get the ship in working order is gonna get caught in the quicksand created by its predecessors.

kashif 8y ago
ha, that is patently untrue, but like your claims mine will also remain unsubstantiated
wtmt 8y ago
> Unfortunately the current government, the first in many years that is actually taking some decisions to get the ship in working order is gonna get caught in the quicksand created by its predecessors. Citation (and additional information) required on this part, please.
kc10 8y ago
> Unfortunately the current government, the first in many years that is actually taking some decisions to get the ship in working order Well, the current government did its part in letting the tycoons, who took large loans, get out of the country. The currency ban was another stupid mistake (source:https://www.nytimes.com/2018/08/30/world/asia/modi-india-rupee-cash.html https://www.nytimes.com/2018/08/30/world/asia/modi-india-rup...) that led to chaos and people lost trust in the banking system. They don't know if they will easy access to their money in the banks with the cash withdrawal limits and ATM issues. If people lose trust and don't deposit the money, eventually the whole system would collapse.
eric24234 8y ago
The BJP(current government) has neither the brains and nor the motivation to develop the country. All they want to do is get the country back to the vedic period(which is nothing but denting the education to the majority of the people).The leader of the party Modi was in the ads(jio) publicly. It was a public announcement by the corporate to the other organizations that they own the government. Also this same government banned the beef. This government is more like trump focusing on religious hatred for votes and nothing more that that(https://en.wikipedia.org/wiki/2002_Gujarat_riots https://en.wikipedia.org/wiki/2002_Gujarat_riots was led by the current leader and prime minister of the party).