Tuesday, April 15, 2014

FTalphaville on what a Modi overnment may not be able to do

From The Lok Sabha of Dreams,  "...the specific hope is that a shiny new BJP-led coalition will kick-start that virtuous cycle as projects are unblocked and investments waved through a la Modi’s creation tale of Tata in Gujarat." may be just that, a hope.
"The broad hope is that, as Goldman said a little while back, a positive cycle can be unleashed if projects get unclogged, increasing cash flow for infra companies (which account for 30 per cent of stressed loans), enabling loan repayments, and healing bank balance sheets, which can allow a fresh lending cycle to start."
But "All told, the fact that most implementation bottlenecks lie within the realm of state governments over which the Center has little leverage, and there is a significant debt overhang facing the infrastructure sector and public sector banks, suggests that expectations of a sharp and sustained pick-up appear optimistic at least in the coming quarters."

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