Former Governor of the Reserve Bank of India (RBI), Raghuram Rajan has warned that non-performing assets (NPAs) or bad loans in the financial sector of the country may increase significantly in the next 6 months. He said that the sooner the problem is identified, the better it would be.
In an online session of the India Policy Forum 2020 organized by Delhi-based think tank NCAER, Rajan said that business has been affected due to coronavirus infection and nationwide lockdown. Many business units are having trouble paying their debts. He said that the level of the NPAs is going to be unprecedented in six months from now if we really recognize the true level of NPAs. We are in trouble and sooner we recognize it, better it is because we really need to deal with the problem. Let us tell you that Rajan was the Governor of RBI from September 2013 to 2016.
Regarding an article by Finance Minister Nirmala Sitharaman published in the newspaper, Rajan said that it talked about the success of Jan Dhan Yojana. But some economists have the opposite opinion. As Vijay Joshi of Oxford University has said, Jan Dhan Yojana does not really work as advertised.
Former RBI governor Rajan said that one thing that is positive for India is that the agricultural sector is doing well. Certainly, the government has come up with reforms. They certainly can be beneficial for a significant portion of our economy if implemented. As part of the reform process for the farm sector, the government amended the six-and-a-half-decade-old Essential Commodities Act to deregulate food items, including cereals, edible oil, oilseeds, pulses, onion and potato.