Mudra loans were to have been the silver bullet that would propel small businesses and presumably the Indian economy into the fast lane. This non-collateralised lending became so widespread that the government even considered using such loan disbursals as an index to estimate unemployment in place of an inconvenient NSSO survey that showed it at a 45-year high. That plan was junked when it became evident that Mudra loans were on the way to becoming another systemic problem. You know there’s a crisis brewing when a normally reticent central bank deputy governor chose to highlight the rising levels of bad debt in such small scale loans.
The simple fact, as the lead edit points out here, is that the “combination of directed lending and a high presence for the state in the banking sector is a recipe for disaster”. Elsewhere on the opinion pages, writers examine the ethanol policy, reservations, and corporate culture. Kanika Datta sums up the views:
Economist Jaimini Bhagwati argues that reservations have eroded human capital in the Indian government, regulatory and public sector institutions. Read it here.
The second edit explains why the current biofuel policy is an invitation to ecological disaster. Read it here.
My column captures a survey that shows that Indian corporations remain homophobic more than a year after the Supreme Court decriminalised homosexuality. Read it here.