Page 220 - ES 2020-21_Volume-1-2 [28-01-21]

Regulatory Forbearance: An Emergency Medicine, Not Staple Diet! 203

a marked improvement in other economic indicators ranging from exports to the Index of
Industrial Production (IIP), as highlighted in Figures 2 and 3. Figure 4 shows that the growth
in total revenue of listed firms also recovered from a low of 4.88% during the crisis to a high
of over 20% in 2011. As shown in Figure 5, growth in bank credit, which had fallen from
22.3% in FY2008 to 16.9% in FY2010, recovered quickly to 21.5% in FY2011. The time was
therefore ripe to withdraw the forbearance; after all the emergency medicine had worked in
restoring the health of the economy. However, the central bank decided to continue with the
same. As shown in Box 2, the forbearance continued for five more years till 2015, even when
its withdrawal was recommended – a clear case of emergency medicine that was chosen to be
made into a staple diet.

Figure 1: Growth rate of Real GDP

Source: NSO
Figure 2: Growth in Exports

Source: Department of Commerce