Banking Crisis Was Infamous Legacy Of UPA With Mountain of Bad Loans: FM Presents White Paper On Economy

The banking sector was facing a crisis around 2014 when the Modi government came into power. According to the White Paper on the Indian Economy tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 8, when the Vajpayee-led NDA government left office in 2004, gross non-performing assets stood at 7.8 per cent. When the Vajpayee-led NDA government took office, the Gross non-performing assets ratio in public sector banks was 16 per cent, and when they left office, it was 7.8 per cent. In September 2013, this ratio, including restructured loans, had climbed to 12.3 per cent largely because of political interference by the UPA government in the commercial lending decisions of public sector banks. On NPA, the white paper also cited a former RBI Governor who in 2018, in a written response to a Parliamentary Panel, stated, “a larger number of the bad loans were originated in the period 2006-2008.” There was “a mountain of bad loans, a high fiscal deficit despite much of it being hidden, a high current account deficit, double-digit inflation for five years which hit the pockets of many Indians and membership of the club of “Fragile Five” in 2013″.