Topic – Indian Economy – Issues
5)An agency like PARA is much needed to alleviate the NPA issue being faced by indian banks. Discuss.(250 words)
Why this question
The idea of PARA discussed in depth in last year’s economic survey has again gained traction. Understanding what PARA is, and how it can help in alleviating the stubborn problem of bad loans is thus important.
Key demand of the question
The question expects us to first explain what PARA is and how will it function. The main focus of the question is on understanding how effective PARA will be in dealing with the problems of bad loans. Both the hits and misses need to be brought out.
Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.
Structure of the answer
Introduction – Explain the problem of bad loans and the suggestion of PARA to tackle this problem
- Explain what PARA is and how will it function
- Highlight why an agency like PARA will be effective in tackling the problem of bad loans. These reasons have been discussed in detail in last year’s economic survey. Have a look.
- Explain why PARA might not be successful
Conclusion – Emphasize on the importance of resolving the problem of bad loans and whether PARA is the way forward.