The government's plan to empower public sector enterprises to take over stressed assets is a dangerous one
As the Narendra Modi government completes three years in office, there is a lot of debate on its achievements and shortcomings. While supporters point to macroeconomic stability, foreign direct investment inflows and infrastructure building, critics talk about tepid job creation, intolerance and centralization of power. However, there is unanimous agreement on both sides of the aisle about a key challenge for the Indian economy: stressed assets in the banking sector. Stressed assets on the books of Indian banks are now higher than the net worth of the entire banking sector, according to a recently released McKinsey & Co. report, “Mastering New Realities: A Blueprint To Transform Indian Banking".