Thread by @naukarshah

Dear PM @narendramodi, this is just a heads up thread.

Your covid relief economic policies are pushing the country into a dangerous triple balance sheet crisis.

And unlike the twin-balance sheet crisis, this will impact families and households in an irrecoverable fashion. 1/n

No. That peacock is not asking for food.

Look here and listen please. This is important.

The twin-balance sheet crisis meant,

1. Over-leveraged companies - Meaning companies have a lot of loan & very less income.

2. Banks with a lot of NPA - Meaning a lot of bad loans. 2/n

And then there was another dangerous trend happening, which got accelerated after your demonetisation master-stroke.

Yes yes.. Zabardast! Kya stroke tha..

Par ab suno..

Household debts were increasing exponentially compared to the income. 3/n

This is a graph comparing growth of house-hold debt and growth of salary and wages (Business Std). You see the divergence?

And this was pre-covid!

Dear PM @narendramodi, samajhna zaroori hai... 4/n

I think it will be easy to understand that during covid, income of most house-holds have come down.

Surprised?

Well, that same survey which said you were the best covid response PM in the world says this too. 22% lost their jobs, 63% suffered income loss. 5/n

Now let us come to what was our economic response to covid-19 distress.

If I have to write it in one word, it was

"Take a loan".

Yeah. I know. The other two words, I took on loan. 6/n

Banks and NBFCs are aggressively pushing for loans. Of all types even as incomes fail to grow or rather fall.

And that would mean a further and exponential widening of these graphs.

Leading to a triple balance-sheet crisis.

Of banks, companies and house-holds. 7/n

If you've been part of a Sarfaesi or a recovery act proceedings, you'll understand that an NPA account for a bank means a lot lot more for the entrepreneur.

It is a dream shattered. One tries the level best to repay, even leveraging personal assets and relations. 8/n

Because one bad loan means no future credit.

It is not just the past dream that one has surrendered.
But even the hope to dream in the future.

This is for entrepreneurs. 9/n

Now imagine for households.

Families, lakhs of them taking loans beyond their income, uncertain of the future, & then forced to default.

Nobody defaults on purpose. Or without trying everything else. Families find every possible way to cut-down.

And then surrenders. 10/n

To save on the fiscal deficit of the union Govt, you are asking every one else to take a loan dear PM @narendramodi. Be it states, companies or families.

Your bureaucrats advising this strategy are being highly short-sighted. 11/n

It will come back to haunt the nation.

Remember, a strong nation means strong people.

Don't weaken the people for the sake of the Govt, dear PM @narendramodi!