Nomura’s Mukherjee on Indian Economy, Shadow Banking

The video discusses the economic challenges in India, highlighting the unexpected downturn in growth over the past four quarters. Despite this, the government has implemented policy measures like tax cuts and potential monetary stimulus to prioritize growth. The shadow banking sector faces issues with liquidity and credit, but these are not expected to lead to a larger crisis. Asset quality remains a concern, with risks to earnings from bad assets and economic slowdown, but a major escalation is not anticipated.

What has been the trend in India's economic growth over the last four quarters?

• Rapid growth with occasional slowdowns

• Consistent growth exceeding expectations

• Fluctuating growth with no clear trend

• Consistent underperformance below expectations

Which policy measure has the Indian government implemented to boost economic growth?

• Introduction of new trade tariffs

• Increase in interest rates

• Reduction in corporate tax rates

• Increase in corporate tax rates

What is the expectation regarding the economic slowdown in India?

• It will worsen significantly

• It will remain unchanged

• It will lead to a recession

• It will pass and lead to a revival

What is a major concern in the shadow banking sector in India?

• Excessive government intervention

• Low liquidity and poor asset quality

• High asset quality

• High profitability

What is the potential impact of economic slowdown on smaller loans?

• Negative impact on earnings

• Decrease in interest rates

• Improvement in asset quality

• Increase in loan approvals