Moody's rating action and the Rs 28 trn revenue push

Penalising banks for past actions is not the best way to make the financial markets work better

The present growth slowdown is the combined impact of many factors, some unavoidable. First, the informal shift to inflation targeting happened at a time when the Indian economy was recovering from the high inflation episode. The emphasis on controlling inflation meant a benign neglect of growth. Second, the asset quality review (though necessary) and the prompt corrective action mechanism initiated during the downswing of the business cycle made banks rightfully conservative in lending. Three, the introduction of several structural measures (like GST, that were delayed for long) and implemented within a short period did have an impact on economy in