Edited excerpts: I think we have clearly proven several things to ourselves that we could ride, first, the covid crisis, because it now looks like it is a distant memory. But for me, it was fresh because that was probably the first event in my life, where I did not know where we would head. The pleasant surprise was how quickly the Indian industry bounced back, and how well the economic conditions and the whole process of stabilizing was done, both by the Centre and the Reserve Bank of India.
And within six months, corporates came back, more efficient than they were. I think the hidden gain there was probably a 25% productivity bump, which yet no economist (has) talked about. We are used to looking at banks’ numbers as proxies for what’s happening on the ground investment.
I think we need to move to looking at the sum of corporate fixed asset growth, plus working capital and working process growth, and that will tell us much better numbers because today, you will have not only bank borrowings, but a very strong cash accrual that is coming through corporates because they are deleveraged and profitable. That cash is not going out to repay bank loans, but to fund the business. And if you need something more, you then always have the capital market to look at...
So, the reliance on banks is going down. If you look at the numbers, probably, the worries are right because you had, what one can in banking terms call ‘unbridled lending and unbridled growth’. If you have a deep conversation with the credit scoring companies, they will tell you a story as to what’s happening with the individual borrower.
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