Old problem, older solution

State-controlled DFIs will have the same problems as PSBs

One of the moves that the government is reportedly taking to increase investment in the upcoming Union Budget is to announce the formation of one or more new development finance institutions (DFIs) to focus on long-term capital financing. Such DFIs would not be a new feature of the Indian landscape, though most of the large institutions set up in the post-independence decades were transitioned into regular banking in the 1990s. Why is the government considering returning to a financing model that it was once thought India had outgrown? Several reasons could be stated in its defence. For one, the hope