Resolving the bad-loans puzzle

The 'holy trinity' of the NIIF, IDFs and a credit enhancement fund could be the solution

Major television channels tell us that the government is likely to take the bull by the horns and tackle banks’ non-performing assets (or NPA) problem squarely. Considering that the “twin balance sheet” crisis is at the root of muted investment sentiment, and therefore suppressed job creation, it is necessary to deal with this at the earliest. However, it is important to understand the totality of the problem first.

Projects that were conceived and funded in the period of high growth prior to the global economic meltdown in 2008 were premised on the belief that the Indian economy would have a free