The Mega PSB Mergers are nothing but a diversionary tactics deployed to draw attention away from the failures of NPA recovery.

FM, Modi Govt continues in Denial while the Economy Tanks

Even the inflated GDP statistics of the Modi government are now showing a serious slowdown in the economy. While the Economic Survey projected 7% GDP growth rate for FY 2019-20, the first quarter data of 2019-20 released by the NSO today shows that GDP growth has dipped to 5% only, with manufacturing growth collapsing to below 1%. This is the fifth straight quarter in which GDP growth has declined which suggests that in reality, the economy has tanked.

The measures announced by the FM today includes Mega PSB Mergers and upfront recapitalisation of Rs. 70,000 crore. The Modi Govt has already spent around Rs. 2.5 trillion in PSB recapitalisation in the last 5 years. If that has not been able to revitalise the PSBs and revive bank credit, how much difference would another Rs. 70K crore make? Actually, these are more of a bailout for the delinquent corporates whose bad loans are being written off by the PSBs, to the tune of trillions.

The Mega PSB Mergers are nothing but a diversionary tactics deployed to draw attention away from the failures of NPA recovery. Attached is the AIBOC statement denouncing the PSB mergers, which puts the issues in perspective.