THE NEWSMAN OF INDIA.COM

The govt, bankers and investors have been cheering the introduction of the new NPA ordinance giving more teeth to RBI and banks to recover money stuck in bad and stressed assets of corporate houses that have not yielded desired investment result. It sounds a solution to the NPA mess but does it ensure against creation of future NPAs ? Like the ones created by farm loan waivers without actually addressing the issues of the farmers. Is Modi govt worried about solving NPA problem or does it want to clean the present mess only to create future NPAs? The banks will recover money from corporate houses but what about NPAs created by politicians?

Business cycle aside the biggest NPA creator in the recent times is the farm loan waiver which has been used as a lolly to win votes. Like the Congress the BJP too wants to use farmers as a captive votebank using loan waiver as an appeasement rather than solve their problems with concrete solutions. With crucial state elections followed by General elections farm loan waiver will continue to add to the NPA bulge because politicians want to keep using this tool to increase their political footprint in the hinterland. Going ahead the common man has no respite but to pay for NPA through high taxes and higher food prices purely for power games of political masters and the poor farmer will continue to look to the sky.

One reason why NPA’s will keep happening

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