NPA problem: Will pills do where surgery is required?

A public sector asset rehabilitation agency is needed to solve the NPA problem

While discussing the problem of non-performing assets in public sector banks in last week’s article, I had referred to the creation of a Public Sector Asset Rehabilitation Agency (PARA), proposed in the pre-budget Economic Survey. As of now, it looks like PARA may not happen in 2017-18, given the huge funding requirements of the organisation, a significant proportion of which will need to come from the government, and the re-capitalisation needs of public sector banks. The total may well come to a few lakh crores of rupees. The budgetary provision is barely Rs 10,000 crore. Postponing the decision could well