Bank lending

The news of declining bank earnings amidst worsening asset quality was anticipated and largely self-inflicted. Banks had been aggressively expanding their loan books, prioritising unsecured consumer loans, including credit card issuances, over quality funding.

Compounding the issue is the shrinking deposit base. Banks’ reliance on CASA deposits is proving less sustainable, as these accounts — especially current accounts — offer minimal or no returns. Simultaneously, mutual fund investments are gaining traction among depositors. These dynamics have contributed to a slowdown in economic activity, dampening GDP growth. Moreover, the RBI, in alignment with the Federal Reserve, is unlikely to cut repo rates as previously expected. This will keep loan costs high, offering no immediate relief. These factors are expected to compress net interest margins and raise NPAs.

Srinivasan Velamur

Chennai

Job creation

Under Prime Minister Modi’s leadership, India has created a historic 17.19 crore jobs between 2014 and 2024, driven by initiatives like Startup India, Make in India, and Digital India. These policies have fostered innovation, entrepreneurship and economic growth, creating opportunities across sectors.

Digitalisation, especially in e-commerce and IT, has provided youth in rural areas with new avenues. With unemployment dropping from 6 per cent in 2017-18 to 3.2 per cent in 2023-24, India’s progress is reducing inequality.

RK Jain Arijeet

Badwani, MP

Tourism economy

Apropos ‘The many intricacies of the tourism economy’ (January 6), we lack precise data on domestic and international tourists, their nationalities and period of their visits. The reason is that we don’t recognise tourism sector as a separate sector like agriculture, industry, IT, MSME, etc. Tourism is the sum total of all activities of travel transport, hotels and lodges, food and consumables, local markets, local employment, etc., all contributing to their corresponding separate sectors. In absence of the appropriate data, we fail on policy-making and the result is not satisfactory for the tourists and the people engaged in the industry.

Vinod Johri

Delhi

Garment exports

This refers to ‘Bangladesh crisis spurs global enquiries for Indian garments’ (January 6). Using the opportunity the government should push more innovations. Curbs on dumping of fabrics from China and priority allocation of cotton for SMEs must be explored

M Raghuraman

Mumbai