On-time payments can drive higher growth

Lacklustre trend growth calls for attention to the economy, with less distractions, diversions, and disruptions. Government can lead with payment on time

India’s economic recovery from the recent slump offers hope of reasonable prospects for the future. There are other encouraging factors that bolster this expectation, such as the reduction in the non-performing assets (NPAs) of banks. Yet, there is the sobering reality of a number of counterpoints that give pause. 

Warnings about constraints limiting average growth to 5 per cent annually arise from many factors:

1. Bank NPAs at nearly 6 per cent are still well above prudential norms.
2. Unviable government overdue payments, the unacknowledged counterpart of NPAs (more on this below).
3. Electioneering practices that are socially disruptive and financially ruinous.
4. Low proportion of women employed (20