For their size, Public Sector Banks Have Had Fewer Frauds Than Private Sector Ones.



A lot has been written on the jeweller Nirav Modi defrauding Punjab National Bank to the tune of $1.8 billion (or Rs 11,400 crore). One line of thought that has been pursued is that of the difference between the public sector banks and the private sector banks.

The logic offered here is that frauds happen only in public sector banks and not private sector banks. And even if they happen at private sector banks, the taxpayer does not pick up the tab. The taxpayer did pick up the tab when the private Global Trust Bank went belly up and had to be merged with the Oriental Bank of Commerce. If the bank is big enough and is going bust, the government has to ultimately come to the rescue, irrespective of whether it is privately owned or government owned. No bank of any significant size can be allowed to go bust.

Now let’s look at the first point I raised, whether public sector banks are defrauded more?

In a recent answer to a question raised in the Lok Sabha, the ministry of finance pointed out that between 2014-2015 and 2016-2017, the total number of bank frauds were 12,778.
Of these 8,622 frauds happened in public sector banks and the remaining 4,156 at private sector banks. The ratio of the total number of frauds at public sector banks to the total number of frauds at private sector banks is 2.07.

The ratio of the average assets of public sector banks to the average assets of private sector banks, between 2014-2015 and 2016-2017, is 2.95. If the ratio of frauds between the two types of banks were to be the same at 2.95, the total number of frauds at public sector banks would have amounted to 12,260 (4,156 multiplied by 2.95). This is not the case. The number of frauds is significantly lower than that. Hence, this basically means that public sector banks are having fewer frauds in terms of their size in comparison to their private sector counterparts in India.

Having said that what is true about public sector banks in general may not necessarily be true for the Punjab National Bank in particular. Punjab National Bank is the second largest public sector bank in the country. As of March 31, 2017, it had total assets worth Rs 7,20,331 crore.

In July 2017, the ministry of finance had provided some very interesting data points with regard to bank frauds. Between 2012-2013 and 2016-2017, a period of five years, the Punjab National Bank faced 942 bank frauds with losses amounting to Rs 8,999 crore.
The only other public sector bank bigger than Punjab National Bank, is the State of Bank of India. As of March 31, 2017, it had assets worth Rs 33,23,191 crore, making it significantly bigger than the Punjab National Bank.

Between 2012-2013 and 2016-2017, the State Bank of India, faced 2,786 frauds with losses amounting to Rs 6,228 crore. Even though the State Bank of India faced more frauds, its total losses were 30.8% lower than that of Punjab National Bank.

Further, of the 78 banks that data was offered on, the Punjab National Bank faced the highest losses due to frauds. It’s average loss on a fraud was also three times the overall average loss on a fraud.

This tells us very clearly that the control systems at the Punjab National Bank were weaker than in comparison to the other banks, and that allowed bigger frauds to happen. In comparison, other banks were placed better than Punjab National Bank. Does this mean that if the bank had better control systems, Nirav Modi wouldn’t have been able to defraud the bank, to the extent that he did? On that your guess is as good as mine.

The column originally appeared on Firstpost on February 20, 2018.


The Old-New Investment Lessons from the Recent Stock Market Crash

It took the BSE Sensex, India’s premier stock market index, a period of nine months (from late April 2017 to late January 2018), to go from 30,000 points to higher than 36,000 points. This meant a return of more than 20% in a period of just nine months.

In an era when fixed deposits give a post-tax return of 5% per year, a return of 20% in less than a year, has to be fantastic. Of course, there are many listed stocks which have given more than 20 % returns, during the same period.

Between January 29 and February 6, 2018, the BSE Sensex has fallen by around 5.8% and wiped out one-third of the gain between April 2017 and January 2018. A week’s fall has wiped off one-third of the gain over a period of nine months.

When the stock market falls, a new set of investors learn, the same set of lessons all over again. What does this mean?

The price to earnings ratio of the BSE Sensex crossed 26 in late January 2018. This basically means that an investor was willing to pay Rs 26 for every one rupee of earning for the stocks that make up the Sensex.

Between April 2017 and January 2018, the price to earnings ratio of the Sensex had moved from 22.6 to 26.4. This meant that while the price of the stocks kept going up, the profit of the companies they represent, did not move at the same speed. Ultimately, the price of a stock is a reflection of the profit that a company is expected to make.

The price to earnings ratio of NSE Nifty touched 27 in late January 2018. The midcap stocks were going at a price to earnings ratio of 50. And the small caps had touched a price to earnings ratio of 120.

Such price to earnings ratios, or what the stock market likes to call valuation, were last seen in 2000 and 2008. With the benefit of hindsight, we now know that at both these points of time, the stock market was in a bubbly territory.

In fact, all the occasions when the price to earnings ratio of the stock market was greater than in the recent past, were either between January and March 2000, when the dotcom bubble and the Ketan Parekh stock market scam were at their peak, or between December 2007 and January 2008, when the stock market peaked, before the financial crisis which finally led to many Wall Street financial institutions going more or less bust, broke out.

Nevertheless, the stock market experts told us that this time is different because there was no bubble in the United States of the kind we saw in 2000 or that the financial crisis that broke out in 2008, was a thing of the past. Hence, there was no real reason for the stock market to fall. (Of course, to these experts, the lack of earnings growth did not matter).

The trouble is that when the markets are in bubbly territory, there typically is no reason for them to fall, until some reason comes along. The first reason came in the form of the finance minister Arun Jaitley, introducing a long-term capital gains tax of 10% on stocks and equity mutual funds. This tax will have to be paid on capital gains of more than Rs 1 lakh, starting from April 1, 2018.

Investors took some time to digest this, and the stock market fell by 2.3%, a day after the budget. If this wasn’t enough, the yield on the 10-year treasury bond of the American government came back into the focus.

This yield jumped by around 40 basis points to 2.85%, in a month’s time. This yield sets the benchmark interest rates for a lot of other borrowing that takes place. In the aftermath of the financial crisis that broke out in September 2008, the central banks of the Western world, led by the Federal Reserve of the United States, printed a lot of money to drive down interest rates.

This was done in the hope of people borrowing and spending money and the economies recovering. That did not happen to the extent it was expected. What happened instead was that large financial institutions borrowed money at low rates and invested them in stock markets all across the world. This phenomenon came to be known as the dollar carry trade.

All this money flowing in drove up stock prices. The problem is that as the 10-year treasury bond yield approaches 3 %, dollar carry trade will become unviable in many cases. Given this, many carry trade investors are now selling out of stock markets, including that of India.

The larger point here is that nobody exactly knows when the stock market will reverse. The way the market has behaved over the last few days, has proved that all over again.

The sellers are not selling out because the valuations are too high (they were too high even a month or two back). They are selling out because of an entirely different reason all together; investors are selling out because they are seeing other investors selling out. The herd mentality that guides investors to buy stocks when everyone else is, also forces them to sell when everyone else is.

Also, the stock market, when it falls can fall very quickly. The last generation of stock market investors learnt this when the BSE Sensex fell by close to 60 % between January 9, 2008 and October 27, 2008.

Is it time for this generation of stock market investors to learn the same lesson all over again? On that your guess is as good as mine.

Stay tuned!

The column originally appeared on Firstpost on Feb 6, 2018.

Economic Survey 2018: It is confirmed; this bull market has seen lower number of bakras

The Economic Survey along with being a good commentary on the state of the economy, also has some very interesting data points. One of the data points in the latest Economic Survey which was released yesterday, concerns the current bull run in the stock market.

The law of demand in economics basically states that at lower price levels, the demand is more. But this doesn’t seem to work for the stock market. Money comes pouring into shares, only after they have rallied a bit. This can easily be seen in the kind of money that has been invested into equity mutual funds during the course of this financial year.

Equity mutual funds largely invest in shares. Between April and December 2017, Rs 1,25,712 crore has been invested (net investment) into equity mutual funds. This is the highest amount of money that has ever been invested in equity mutual funds, during the course of any financial year, and the current financial year ends only in March 2018. 

As the overall stock market has gone higher and higher, more money has come into it. Other than mutual funds, public and private offerings of shares by companies, also tend to blossom when the stock market is doing well. It allows companies to sell their shares, at higher prices than they would be able to manage at any other point of time. This incentive motivates more and more companies to sell their shares, which get lapped up by the stock market investors.

The following table shows the total amount of money raised by companies through the sale of shares.



Take a look at the above Table. Rs 1,52,919 crore has been raised by firms between April 2017 and November 2017, by selling their shares, during this financial year. In absolute terms, it remains the highest amount of money ever raised by companies by selling shares. The next best year was 2007-2008, when companies managed to raise Rs 1,40,844 crore, through the sale of shares.

Nevertheless, this does not take into account the fact that the Indian economy in 2017-2018 is significantly bigger than it was in 2007-2008. Hence, the capacity of the companies to raise money by selling shares, is also significantly more than it was ten years back.

How do things stack up when we look at the money raised by companies by selling shares as a proportion to the overall size of the Indian economy (the gross domestic product (GDP)). Take a look at the next Figure.



The ratio of the total amount of money raised by companies through the sale of shares to the gross domestic product, was higher in 2007-2008 than 2017-2018. As a size of the economy, companies raised more money ten years back than they have managed to do during this financial year. As we can see from the above Figure, the total money raised through the sale of shares was around 2.8 percent of the GDP, in 2007-2008. In 2017-2018, this was at around 1.5 per cent. (Look at the left axis of the figure).

Given that a lot of money raised through the sale of shares in 2007-2008 and even in 2017-2018, was and has been raised at very high prices (look at the red line in the above figure which maps the price to earnings ratio), many new investors who venture into the stock market very late in the game, tend to be made bakras in the process. They lose money on their investments.

The good thing is that during this bull run, the proportion of bakras given the increased size of the Indian economy, has been lower than was the case in 2007-2008. At least, that is what the Economic Survey data seems to suggest.

The column was originally published on January 30, 2018, on Firstpost. 

Personal income tax comes to Narendra Modi govt’s rescue as corporate tax falls

Earlier this week, the government released some interesting data on direct taxes which essentially are composed of corporate taxes, personal income tax. They also include tax collected through the income tax amnesty schemes launched by the governments over the years.

How have these taxes done over the years? Has the Narendra Modi government managed to collect more direct taxes than the earlier government’s (as is often said)? The recently released data provides the answers.

Take a look at Figure 1. It basically plots the direct taxes to the GDP ratio over the years.

Figure 1:

Tax to GDP



What does Figure 1 tell us? It tells us very clearly that the direct taxes collection as a proportion of the GDP, has remained flat over the last few years, including the three years of the Modi government. It also tells us very clearly that whenever a politician talks about the collection of direct taxes (or for that matter any other tax) going up, it should be in the context of the size of the economy (i.e. the GDP).

If that is not the case, then he or she is clearly bluffing or does not understand how taxes are reported. As I said earlier, the direct taxes are comprised of personal income tax, corporate tax and other direct taxes. First and foremost, let’s take a look at how things look if we ignore the other direct taxes. This is important for the year 2016-2017, when the government managed to collect a significant amount of tax, through two income-tax amnesty schemes, one launched before demonetisation, and one after it.

Figure 2:

Net direct tax

Source: Author calculations based on data taken from

Unlike Figure 1, which curves up at the end, Figure 2 is more flattish, once we adjust for the other direct tax. This matters in a year like 2016-2017, when the government collected Rs 15,624 crore as other direct tax, much of which was collected from income tax amnesty schemes. Once adjusted for this, the direct taxes to GDP ratio in 2016-2017 falls to 5.49 percent. In 2015-2016, it was at 5.46 percent of the GDP. This is much lower than the 6.30 percent achieved in 2007-2008. Hence, the direct taxes to GDP ratio has fallen over the years.

It is important to take a look at how does the situation look for corporate tax and personal income tax, as a proportion of the GDP, the two most important constituents of direct taxes. Let’s take a look at Figure 3, which plots the corporate income tax as a proportion of GDP.

Figure 3:

Corp tax

Source: Author calculations based on data taken from

Figure 3 tell us very clearly that corporate income tax to GDP ratio has been falling over the years. It has fallen from a peak of 3.88 percent of the GDP in 2007-2008 to 3.19 percent in 2016-2017. One reason for this has been the slow growth in corporate earnings over the last few years. Finance Minister Arun Jaitley has talked about lowering corporate income tax rates, but that hasn’t really happened. Whether lower taxes lead to higher collections remains to be seen.

Now let’s take a look at Figure 4, which plots to the personal income tax to GDP ratio.

Figure 4:

personal tax

Source: Author Calculations based on data taken from

Figure 4 makes for an interesting reading. While, personal income tax to GDP ratio like the corporate tax to GDP ratio also fell, it has managed to recover over the years. Basically, the loss of income tax from the corporates has been covered by getting individuals to pay more income tax, on the whole. One reason for this lies in the fact that the number of individual assessees have risen at a much faster rate over the years, than the number of corporate assessees. And this jump has basically ensured that the tax collections of the Narendra Modi government have continued to remain flat. They would have fallen otherwise.

The column originally appeared on Firstpost on December 21, 2017.

Demonetisation’s negative impact on economy is not done yet, it will continue; be warned

In a few days, the first anniversary of demonetisation will be here. The Narendra Modi government will continue doing what it has done in the last one year—give demonetisation a positive spin.

But how can a decision which made 86.4 per cent of the currency in circulation, useless overnight, in a country where 80-98 per cent of the transactions were carried out in cash (depending on which estimate you would like to believe), be a positive one?

Let’s take a look at Figure 1. It basically plots the annual growth in non-oil non-gold non-silver imports.

Figure 1:
Vivek story chary1

What does Figure 1 tell us? First, it tells us that the annual growth in non-oil non-gold non-silver imports had been rather subdued since January 2015. In fact, it has been in the negative territory several times, especially in a few months before November 2016, when demonetisation was announced.

But after November 2016, the growth in non-oil non-gold non-silver imports simply took off and reached a peak of 42.5 per cent in April 2017. This basically means that these imports where 42.5 per cent higher in April 2017 in comparison to April 2016.

What does this tell us? It tells us that a significant portion of the consumer demand post demonetisation has been fulfilled through higher imports. So far so good.

Demonetisation basically disrupted and destroyed supply chains, both in the formal as well as the informal economy. With supply chains being destroyed, the supply of domestic goods has been replaced by imports and has not been fulfilled through the production of domestic firms.

It is worth remembering here that imports are a negative entry into the gross domestic product (GDP) formula.
C = Private Consumption Expenditure
I = Investment
G = Government Expenditure
NX = Exports minus imports

Hence, if imports grow at a faster pace than exports, they pull down the GDP to that extent. Exports during this year (between April to September) have gone up by around 10.9 per cent in comparison to last year. Imports are up by 22.3 per cent. Given this, it is not surprising that the economy has slowed down. The economic growth for the non-government part of the economy, which forms around 90 per cent of the economy, was around 4.3 per cent, for the period between April to June 2017. This was more than 9 per cent in early 2016.

Hence, demonetisation has played a huge role in slowing down economic growth. And this is tragic given that one million Indians are entering the workforce every month. In fact, it has also rendered a standard tactic in reviving economic growth, pretty much useless.

Allow me to explain. When countries are not doing well on the economic front, the standard prescription offered by economists is for the government to spend more. When the government spends more, the extra spending becomes somebody’s income. When that income is spent, businesses benefit, and the economy revives.

The trouble is that in the current situation if such a prescription is applied on India (actually to some extent it already has been), the government spending will eventually create consumer demand, a substantial portion of which will be fulfilled through imports. Imports, as we have already seen, are a negative entry into the GDP formula. Given this, a fiscal expansion instead (the act of government spending more) of creating faster economic growth might just slow it down.

The point being that we aren’t done yet with the negative effects of demonetisation. There’s more to come.

The column originally appeared on Firstpost on November 3, 2017.

Fiscal stimulus is already on, why doesn’t the govt try lowering taxes?


Media reports suggest that the central government is planning a fiscal stimulus. In simple English, what it basically means is that it is planning to spend more than what it had budgeted for, during this financial year.

Fiscal stimulus is an idea that politicians have latched on to for nearly eight decades since the British economist John Maynard Keynes published his tour de force The General Theory of Employment, Interest and Money in 1936. What Keynes suggested in this book was that in a tight economic situation, cutting taxes, so that people would have more to spend, was one way out to revive economic growth.

But the best way was for the government to spend more money, and become the “spender of the last resort”. Also, it did not matter if the government ended up running a fiscal deficit in doing so. Fiscal deficit is the difference between what a government earns and what it spends. When Keynes wrote this book, governments budgets used to be balanced (i.e. expenditure was more or less equal to revenue).

It wasn’t fashionable for governments to run a fiscal deficit back then, as it is now. Given this Keynes suggested that in a tight economic situation (the world was going through what we now call the Great Depression) it made sense for the government to spend its way out of trouble. And if that meant running a fiscal deficit, so be it.

Since then, it has been time honoured tradition for politicians and a section of economists to talk about the government spending more, in times of economic trouble. The idea being that with the private consumption slowing down, if the government spends more, incomes will go up, and this will help in reviving private consumption expenditure, which in turn will push up economic growth.


In fact, the government has already started providing a fiscal stimulus to the economy, during the first few months of this financial year. Take a look at Figure 1.

Figure 1:

Fiscal stimulus 1

Source: and

What does Figure 1 tell us? It tells that between April and July 2017 of the current financial year, the government has already touched 92.4 per cent of the fiscal deficit target that it had set at the beginning of the year. As is obvious from Figure 1, this is way beyond what usually happens.
Now take a look at Figure 2. It plots the proportion of government expenditure carried out during the period April to July (the first four months of the financial year) against the total expenditure achieved/planned for the financial year.

Figure 2:

fiscal stimulus 2
Source: and

What does Figure 2 tell us? It tells us that during a normal year, the government spends around one-third of the total expenditure during the first four months of the year. And this is a logical thing to do, given that four months constitute one-third of a year.
This time around, the government expenditure during the first four months of the year is at 37.7 per cent of the total expenditure that the government plans to incur during the year.

What Figure 1 and Figure 2 tells us is that the fiscal stimulus is already on. If the government continues to spend at the same rate as it is currently, it will end up spending 13 per cent more than it had planned at the beginning of the financial year. This will push up the budgeted fiscal deficit by around 51 per cent (assuming government revenues remain the same).

This will push up the fiscal deficit to 4.9 per cent of the gross domestic product(GDP) against the set target of 3.2 per cent of the GDP. Now what the government needs to decide is whether it should continue spending money at the rate that it currently is.
Also, what this means is that people who are now asking for the government to unleash a fiscal stimulus, probably do not know, that a stimulus is already on.

In fact, the government spending more than the usual, helped the GDP grow by 5.7 per cent during the period April to June 2017. In fact, if we leave out the government expenditure from the GDP, the non-government part, which constitutes close to 90 per cent of the GDP, grew by just 4.3 per cent. Hence, the impact of the fiscal stimulus is clearly there to see.

The trouble is that most fiscal stimuli flatter to deceive. It does help in pushing up economic growth initially, but ends up creating more problems, which the economy has to tackle in the years to come.

India’s last experience with a fiscal stimulus was disastrous. It was unleashed in 2008-2009. It propped up economic growth for a couple of years. But it also led to high inflation and high interest rates. It also led to banks going easy on lending and in the process ended up creating a massive amount of bad loans, which the system is still trying to come out from.

Also, it is worth remembering that the state governments run fiscal deficits as well. During 2016-2017, the combined fiscal deficit of the central government as well as the state governments had stood at 6.5 per cent of the GDP, down from 7.5 per cent, in 2015-2016. During this financial year, many state governments are expected to run higher fiscal deficits because they have waived off farmer loans. With the central government also spending more, the combined fiscal deficit will cross the 7 per cent level and that is not a good thing.

People in decision making should remember these points raised above. The trouble is politicians like to look up to the next election. And the fiscal stimulus that has been unleashed now is likely to keep perking up economic growth over the next year or two and this will help the incumbent government in the next elections. Having said that, as I mentioned earlier, it creates other problems in the time to come.

Also, it needs to be clarified here, that Keynes wasn’t an advocate of a government running high budget deficits all the time. Keynes believed that, on an average, the government budget should be balanced. This meant that during years of prosperity, governments should run budget surpluses. But when the environment is recessionary, governments should spend more than what they earn, even running budget deficits.

But over the decades, politicians have only taken one part of Keynes’ argument and run with it. The idea of running deficits during bad times became permanently etched in their minds. However, they forgot that Keynes had also wanted them to run surpluses during good times.

To conclude, other than the government spending more, Keynes also talked about lowering taxes. Why doesn’t the government try and lower the GST rates to start with?

The column originally appeared on Firstpost on September 23, 2017.

How Do You Solve a Super-Mess Like Jaypee Infratech


The real estate company Jaypee Infratech will go through insolvency proceedings. Earlier, this week, the Supreme Court asked the insolvency resolution professional to take over the management of the company. The insolvency resolution professional has also been asked to submit an interim resolution plan within 45 days. This plan is expected to take into account the interests of homebuyers i.e. those people who paid Jaypee Infratech for homes that were never delivered. In doing this, the Supreme Court modified an earlier order.

Here is an excellent example of messy situation which has probably got messier.
Jaypee Infratech has defaulted on a loan of Rs 526.11 crore from IDBI Bank. At the same time, the company took money from 32,000 prospective homebuyers with a promise of delivering homes. How much money was raised from these homebuyers? The numbers in the media vary from Rs 17,000 crore to Rs 25,000 crore.

This basically means that an average buyer paid Jaypee Infratech anywhere between Rs 53 lakh to Rs 78 lakh. That is clearly a lot of money. The Bankruptcy and Insolvency Code in its current form does not leave anything for the buyers. The homebuyers are not on the list of entities that will be compensated for payment of what is due to them once the company is liquidated.

From the legal point of view this makes sense given that the money that the buyers had handed over to the real estate companies was basically an advance and not a loan. But then given that thousands of families are involved, should only the legal view prevail is a question even though tricky, worth asking. The Supreme Court now needs to decide whether the buyers are financial creditors or not.

Of course, the bureaucrats who wrote the bankruptcy code did not take the real estate sector and the way it operates, into account.

Let’s consider the situation with Jaypee Infratech. It has defaulted on a loan worth Rs 526 crore. The company would have offered an asset(s) as a collateral or a security against this loan. This asset can be sold and IDBI Bank can get the money, back. Of course, it may or may not get the entire defaulted loan amount back. This would depend on the current market value of the asset(s) offered as a collateral.

Of course, in the current scheme of things, the homebuyers are nowhere in the picture. The insolvency resolution professional has to come up with a plan that can correct for this scenario. One of the things that could possibly be looked at is to handover the project to another builder who can complete the project. But this builder would need more money for it. Where will this money come from? Will the buyers who have already paid anywhere between Rs 53 lakh to Rs 78 lakh on an average, be in the mood, to handover more money? More than the mood, will they have more money to handover? We aren’t talking exactly about small amounts here.

Further, if there is talk of compensation from selling the collateral, what sort of compensation can the buyers look at? The asset that Jaypee Infratech must have offered as a collateral was for a loan worth Rs 526 crore. How would that be enough to compensate 32,000 homebuyers who had invested anywhere between Rs 17,000 crore to Rs 25,000 crore in total, with Jaypee Infratech.

Another option is sell the half-built apartments (or in whatever shape they are in) to a new builder and then use that money to compensate the buyers. Of course, in this case, the buyers will have to take a haircut (i.e. they will not get their full money back). Also, will other builders be ready to buy in this environment where the real estate sector isn’t exactly going anywhere.

Jaypee Infratech defaulted on the loan it took from IDBI Bank. It also took a lot of money from homebuyers and did not deliver apartments. Where has all this money gone? Has it been siphoned off? Has it been used to build a landbank? Has it been used to complete previous projects? If it has been used to complete previous projects, then where did the money collected for those projects, go? Or has it been diverted to other group companies?

The bankruptcy and insolvency code in its current form does not allow for a forensic audit of companies which have defaulted on bank loans. But that is precisely what is required in case of Jaypee Infratech to figure out where did such a huge amount of money disappear. The amount that has been siphoned off from buyers is so huge that it cannot be repaid using the assets that may have been offered as a collateral against the bank loan which has been defaulted on.

Of course, any forensic audit will take time. But there is hardly any other market based solution that can be arrived at. Further, a situation as messy as this one is, cannot be set right in a short period of time. Also, it will set the tone for other similar cases, which are bound to come up in the days to come.

In the days to come, there will be great pressure on the government to bailout the homebuyers and if not that, at least compensate them to some extent. The government needs to resist this because if it doesn’t, it will send up setting a bad precedent.

The larger point here is that in this case the bank default is hardly an issue. The bigger issue is the fact that such a huge amount of money has been siphoned off from the homebuyers. The learning here is that the cases of bank defaults and homes not being delivered, are two separate cases and need to be considered separately as well. The central government now needs to work actively towards a market based solution.

Meanwhile many homebuyers will continue paying an EMI on the home loans they took to buy their dream homes. They would be paying money towards an asset which they won’t be getting their hands on, anytime soon. They will also have to continue paying a rent for the homes that they currently live in. Of course, this is not a great situation to be in.

But then that’s how big the mess in India’s real estate sector is. And that is not going to change anytime soon.

The column originally appeared on Firstpost on September 13, 2017.