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A man once approached JP Morgan, the famous financier and banker, for a loan. Morgan did not give him any money but took him for a long walk across New York. The man tagged along hoping to get something.

When they reached back from where they had started, Morgan calmly told the man that nobody would now refuse him a loan in New York. “Well, you have been seen with JP Morgan,” he reportedly said.

Although it may sound superficial, it’s a classic study in the money game. Being associated with the right person or with the right cause can make borrowing easy. If you could pardon the rather long stretch, I wonder why Indian banks still find it difficult to open their purses for infrastructure projects.

Is not the nation’s infrastructure development a good enough or a right cause? Although the industry expects the government to do more, it will be unfair if we do not consider the affirmative measures taken recently to boost the availability of funds to this sector. In this context, it will not be incorrect to assume that because of the government efforts, our public sector banks are sitting on a lot of hard cash.

What is critical is to find ways to bring this hard cash out for the right causes. When the recession was just creeping in, there were talks of investors pulling money out of the stock market and putting it into banks.

We cannot ascertain whether these talks have an element of truth to them or they are just figments of a stock broker’s imagination. We definitely don’t want to get into rumour mongering but there are reasons to believe that banks do have sufficient funds.

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COMMENT Comment on this article

We do not see why there should be fear about the stability of the country’s economic condition, particularly from an investor perspective. Domestic demand will continue to drive growth and it will be a matter of time before the economy recovers from the current state of stupor induced primarily for sentimental reasons rather than logical ones.

Despite the gloom, the Central Statistical Organisation has already given healthy figures for the nation’s economic growth - something asserted by the finance minister during the interim budget. Enough evidence for the statistically inclined, we believe. And if Standard and Poor’s ‘Asia-Pacific Markets Outlook 2009’ is to be believed, the Indian economy will start recovering not later than July 2009.

At the time of going to print, we are still days away before the finance minister tables the Union Budget. To be honest, we are not expecting miracles but are certainly hoping that the government does not lose focus from infrastructure development, notwithstanding the looming election.

And yes, we are happy to see the importance given to rural infrastructure. That’s where the next economic growth will come from.

Do tell us what you think.

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