'Challenge is basically near-term growth as the outlook has turned a bit adverse.'
Among the states due for election next year are AP, Haryana and Odisha, which have a fair share of agri credit. If these states individually announced debt relief, the combined waiver would be at least around Rs 600 bn to Rs 700 bn. Clearly, this will be a frightening challenge for Indian banks.
The companies' underrecoveries stood at a whopping Rs 1,39,869 crore last financial year. Of that, Rs 62,837 crore was accounted for by diesel alone.
This means lower losses on fuel sales by Indian oil companies and a shrinking oil subsidy bill for the government.
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