Sentiment Booster | Are confidence building measures enough to overcome lenders’s risk aversion?
Banks are parking almost a trillion rupees daily at the RBI’s overnight repo window. That shows they have money but are unwilling to lend.
August 26, 2019 / 09:40 AM IST
Finance Minister Nirmala Sitharaman’s set of announcements Friday reiterate the government’s strategy of trying to spur consumption and investment by lowering the cost of capital and boosting credit flow. The key question that emerges is this: are these confidence building measures enough to overcome lenders’ risk aversion? Probably not.
With total public sector borrowing at close to 9 percent of GDP, the government’s hands are tied. Even the buzz of a possible fiscal stimulus was enough to raise yields on...