Fix credit growth to fix the slowdown

The Indian banking crisis has merely meant a lower level of GDP growth than before the onset of the crisis

There is much hand-wringing over the slowdown in India’s GDP growth. The growth rate of 5.8 per cent in the last quarter of FY 2018-19, in particular, has set alarm bells ringing. Many believe the time has come for another bout of sweeping structural reforms. The responses required may well be more modest.

A slowdown in growth is not a huge surprise. Leave aside the turbulence in the world economy. We are in the midst of a banking crisis. It’s not a severe banking crisis (one where non-performing assets, or NPAs, exceed 25 per cent of all loans). And it’s not