Sharing the optimism in the document, ASSOCHAM President Sunil Kanoria said while the only drag is the export sector and overall external scenario is playing itself out, helping India. "We would call it ‘Luck by Chance' factor. See, the moment dollar started rising against rupee due to strengthening of the US economy, global prices of two main import items for India -crude oil and gold fell further. So, it was an even -out situation giving the RBI Governor extra room in the face of global headwinds". 

The ASSOCHAM Review, however, remained worried about the continuous stress on the balance sheets of the public sector banks, underlining the need for a multi-pronged strategy by the Finance Ministry, RBI and the bank managements along with the major borrowers who are well meaning but somehow find themselves in woes of hard economic realities.

The combined stressed assets and NPAs may well be 15 per cent of the total advances, which have to be brought down substantially without any further loss of time. No significant credit growth is possible if this issue is not resolved.

"Even if interest rates become further benign, the NPAs and stressed assets would remain a major deterrent for credit growth," the paper mentioned.
END