The growth was declining because of the rising NPAs in the banking sector. Kumar said: “When this (Narendra Modi) government came to office, that figure was about Rs 4 trillion. It rose to Rs 10.5 trillion by the middle of 2017, because under the previous RBI governor Mr Raghuram Rajan, they had instituted a new mechanism to identify stressed NPAs. This continuously began to rise, after which the banking sector stalled credit disbursal to the industry. In some cases like that of the MSME (micro, small and medium enterprises) industry, credit actually shrank. It was a negative growth in some years.”
On Sunday, Congress leader P Chidambaram had countered the PM’s statement that loans given under UPA have turned bad. “How many of those loans (given under UPA) were renewed or rolled over (that is 'evergreened') under NDA? Why were those loans not recalled,” Chidamabaram had asked. On Monday, Kumar said there was “no evidence” to show direct link between economic slowdown and demonetisation, and the decline being simply in continuation of a trend and not because of the shock of demonetisation as has been claimed.