Credit crisis is easing in India, but only for safest corporate borrowers

The cash squeeze in the nation's shadow banking industry, which lends to everyone from street vendors to property tycoons, shows few signs of abating

India’s credit crisis appears to be winding down for the safest borrowers, but it’s hardly time to celebrate as weaker firms still struggle.

Policy makers have been fighting to prevent debt markets from seizing up since the shock collapse of shadow bank IL&FS Group last year. 
 

They can take some cheer in this: spreads on top-rated corporate bonds have dropped back near where they were when the crisis began in September last year.

Much work remains to be done. Lower-rated companies are still struggling with a cash squeeze and rising borrowing costs. Economic growth slowed to 4.5 per cent last quarter, the