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A major downside risk to India s economic growth continues to be the pandemic-induced morbidity and the rising coronavirus cases that has elevated health stimulus as a key macroeconomic lever for India’s continued recovery, the finance ministry said in its monthly economic review report for February. While India continues to avoid the second wave of pandemic, there has been a surge in cases in eight states underscoring once again the inevitability of social distancing in keeping the pandemic at bay until a critical mass of inoculated population builds up immunity to control the growth of infection in the country, the department of economic affairs said. ....
Global rating agency Moody s on Thursday said that India s economic recovery reduces the risk of a sharp deterioration in public sector banks (PSBs) mildly improving asset quality. However, the capital shortfalls will remain despite a likely government equity infusion and this makes banks vulnerable to unexpected shocks and restricting credit growth. Various measures by the government to support borrowers have helped curb growth in public sector banks non-performing loans (NPLs), and the volume of restructured loans is not as large as we anticipated, said Rebaca Tan, a Moody s assistant vice president and analyst. Asset quality at the five largest rated PSBs in India – State Bank of India , Bank of Baroda, Punjab National Bank, Canara Bank, and Union Bank of India – improved mildly in the first 9 months FY21 despite an economic contraction exacerbated by the Coronavirus (Covid-19) pandemic. ....