Subir Gokarn: Can our banks finance the economic recovery?

The banking system's capacity to finance the ongoing recovery may become a constraint

Subir Gokarn

There is little question now that the Indian economy is steadily climbing up from the bottom. Even though the industrial growth numbers are still quite low, the fact is that they are rising. Key sectors like basic metals and automobiles have been growing steadily over the past few months. Most importantly, the dramatic decline in oil prices over the past couple of months has completely re-written the macroeconomic script. The three major stress points - inflation, the current-account deficit and the fiscal deficit - will ease off significantly over the next few months if oil prices remain at ...