The writer is a managing director at BlackRock and a former FT journalist
When State Bank of India, the largest bank in the country recently reported earnings, one trend stood out for some observers: loans made against the collateral of gold jewellery were up 300 per cent in the first quarter over the year earlier period.
Such loans are a symptom of widespread distress for Indians, most of whom have seen their circumstances deteriorate even before the second wave of the coronavirus pandemic inflicted deep economic scars on the country.
In the past fiscal year, the economy shrank 7.3 per cent. That was before the second wave hit, putting the economy in a sort of limbo. “Households are not borrowing, businesses are not investing and banks aren’t lending,” said economists from JPMorgan at the end of May.
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