Moreover, one in eight of the households in the panel started the crisis with zero or negative net worth and thus had scant resources to fall back on to maintain their standard of living during bouts of unemployment. Unemployment and declines in wealth obviously can make it difficult for a household to pay its debts on time.
Fiscal consolidation and reorientation of expenditure towards capital expenditure is required to meet the target. The banking system, despite the risk of assetliability mismatch while lending for long-term infrastructure projects, has seen high growth in credit to this sector in recent years.