- In absolute terms, leakages are greatest in UP, West Bengal, Gujarat, and Maharashtra; in per capita terms, leakages are greatest in Haryana, Gujarat, and Punjab; and in %age of actual allocations, they are greatest in the Northeastern states of Manipur, Sikkim, and Arunachal Pradesh.
- As of December 2014, over 720 million citizens had been allocated an Aadhaar card. These enrolments are increasing at a rate of 20 million per month and by December 2015, the total number of Aadhaar enrolments in the country is expected to exceed 1 billion.
- India has the largest Postal Network in the world with over 1,55,015 Post Offices of which (89.76 %) are in the rural areas.
- One sector with large a number (and total worth) of stalled projects in both public and private sectors is electricity. At the end of third quarter of this financial year, 80 projects were stalled in the electricity sector out of which 75 are in generation and 5 in distribution, and 54 of these 80 are in fact private.
TOP REASONS FOR STALLING ACROSS INDUSTRIES |
||
| Industry | No. Of Projects | Top Reasons |
| Manufacturing | 212 | Unfavourable market conditions |
| Mining | 40 | Lack of non-environmental clearances |
| Electricity | 80 | Fuel/ feedstock/raw material supply problem |
| Services | 283 | Lack of promoter interest |
| Construction and Real Estate | 143 | Lack of non- environmental clearances |
- To some extent high levels of debt may be justified if a company has sufficient earnings to pay the interest component of outstanding debt.
- This ability of a company to pay the interest on its outstanding debt is measured using the Interest Coverage Ratio (ICR).
- ICR is technically defined as the ratio of a company’s earnings before interest and taxes (EBIT) of one period to its interest expenses over the same period. An ICR below 1 therefore indicates a low EBIT relative to interest expenses and highlights serious weaknesses in the company’s balance sheet.
- Percentage of companies in a large sample of 3,700 listed companies in India that have ICR <1.
- The Indian banking system is afflicted by what might be called “double financial repression”.
- Financial repression on the asset side of the balance sheet is created by the statutory liquidity ratio (SLR) requirement that forces banks to hold government securities, and priority sector lending (PSL) that forces resource deployment in less than- fully efficient ways.
- Financial repression on the liability side has arisen from high inflation since 2007, leading to negative real interest rates, and a sharp reduction in households’ financial savings. As India exits from liability-side repression with declining inflation, the time may be appropriate for addressing its asset-side counterparts.
- Recapitalisation requirements for Public Sector Banks as estimated by Krishnamurthy Subramanian (ISB and member of Nayak Committee) range from ` 9.6 lakh crore to ` 4.8 lakh crore depending on the assumptions on forbearance and the ratio of restructured assets turning into NPAs.
- Household savings continue to be the largest contributor to gross capital formation.
- The Statutory Liquidity Ratio is a requirement on banks to hold a certain share of their resources in nliquid assets such as cash, government bonds and gold. In principle, the SLR can perform a prudential role because any unexpected demand from depositors can be quickly met by liquidating these assets.
- As of Feb 4, 2015 the minimum requirement is 21.5 % of total assets. Banks typically keep more than the required SLR, the current realised SLR is in fact over 25 %.
- In practice, the SLR has become a means of financing (at less than market rates presumably) a bulk of the government’s fiscal deficit, suggesting that SLR cuts are related to the government’s fiscal position.
- A key component of equality of credit in India has been the so called “priority sector lending”. All Indian banks are required to meet a 40 % target on priority sector lending.
- The law states that all domestic commercial banks, public or private, have to lend 40 % of their adjusted net bank credit (ANBC) or credit equivalent amount of their off balance sheet exposure— whichever is higher—to the priority sectors, and number for foreign banks (with more than 20 branches) is 32 %.
- Further, public sector banks have clearly defined rules they have to follow in the subcategories- agriculture, micro and small enterprises, education, housing, export credit and others. The most important amongst them is that 45% of all priority sector lending must be made to agriculture.