Key Points
This is the second of a two-part series on macroeconomic lessons from Indias bad loan crisis..
The first part of this series looked at the significant reduction in Non-Performing Assets (NPA) in Indias banking system..
While a fall in creation of new NPAs has helped, the write-off of bad loans and recapitalization of government banks using taxpayers money has also played a big role in bringing down NPAs..
There is good reason to argue that the scars of Indias bad loan crisis have also led to subdued investment spending in the economy, which also means weaker tailwinds for current and future economic growth..
