While deposits are accepted at unsustainably higher rates, loan pricing is done in imprudent manner without factoring in cost of funds. Many cooperatives are unable to generate enough revenue or surplus to sustain their operations and boost capital formation on account of very thin or negative margins.
Let me reiterate that a good balance of monetary policy, fiscal policy and structural reform will altogether bring out a policy mix that will take the country many steps forward toward faster and more sustainable growth. Lessons from countries that are successful in implementing structural reforms to boost their economic growth such as China and India, will be especially valuable. 35.