Moneycontrol
Jun 15, 2017 10:10 AM IST | Source: CNBC-TV18

Likely increase in farm loan waivers to dampen sentiment on PSU banks, NBFCs: CLSA

Assuming these are staggered over five years, the annual rise in consolidated fiscal deficit works out to 25 bps of GDP, CLSA said.

Likely increase in farm loan waivers to dampen sentiment on PSU banks, NBFCs: CLSA

Mahesh Nandurkar of CLSA said analysis of agri stress indicates that Tamil Nadu, Karnataka and Haryana may follow up with farm loan waivers, taking the total farm loan waivers to about USD 28 billion from USD 10 billion.

Assuming these are staggered over five years, the annual rise in consolidated fiscal deficit works out to 25 bps of GDP. Else, other developmental expenditure would be compromised, potentially softening a capex cycle upturn, he added.

He feels this would dampen investor sentiment on PSU banks and NBFCs. Among the rural plays, top ideas are Mahindra and Mahindra and ITC.
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