ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Twin Balance Sheet Problem

Causes, Consequences, Remedies

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Finance Minister Arun Jaitleys budget proposed a measly 10,000 crore towards recapitalisation of public sector banks (PSBs). The budget thus steered clear of the biggest constraint to growth today: what the latest Economic Survey labels the twin balance sheet (TBS) problem.

Indias leading corporates have too much debt on their balance sheets; this keeps them from making fresh investment. Banks are weighed down by a mountain of bad loans; this comes in the way of credit growth. TBS impacts growth by affecting both the demand for credit and the supply of it.

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Published On : 20th Jan, 2024

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