Letters: Resume projects

With reference to the editorial, "A long haul" (August 7), despite the implementation of various reforms to spur growth, the results of India Inc for the quarter ended June are dismal. Asset quality issues persist and is hampering the growth of credit and investment in sectors such as infrastructure and manufacturing. Credit is a crucial driver of the economy. The government and banking regulator need to tackle the impairing asset quality of banks to enable credit expansion.

The segments with a major chunk of bad assets should be allowed to kick-start their projects for which clearance is pending from various authorities. The bankers to these projects have to support them in terms of the 5/25 scheme of the Reserve Bank of India (RBI). With high cost of borrowing curtailing the debt servicing capacity of India Inc, the government and RBI should go for a further rate cut, besides pushing banks for full transmission of the previous rate cuts during the current year.

V S Kesava Pillai Kottayam

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