Part 3/9:
Over the past few years, the Indian government’s efforts to stimulate the economy led to a booming fiscal environment; however, the anticipated spillover effects into the private sector have not materialized. Instead, the nation appears to be entrenched in a troubling situation, characterized by a shadow credit boom that is starting to dissolve. Furthermore, interbank liquidity is unusually tight, reflecting the complications stemming from the RBI's interventions.
Despite the government's attempts to invigorate the economy, it has become increasingly apparent that the underlying private sector remains underwhelming. The considerable amount of resources channeled into curbing the currency tailspin is indicative of deeper systemic issues.