Credit crunch hits common investors: Congress

New Delhi: Ahead of the Union Budget on July 5, the Congress here on Monday said common investors were suffering due to the lack of investment in the economy.

Congress spokesperson Randeep Singh Surjewala in a tweet said, “a year after the Lehman moment for economy, the wealth of more than Rs 1 trillion of 11 firms has been eroded as ordinary investors suffer”.

The liquidity crisis in the non-banking financial companies (NBFCs) following default by IL&FS on its commercial papers last year has widely been dubbed as India’s Lehman moment. Refinancing of Rs 2.03 trillion outstanding bonds was a major challenge, he added.

Reiterating the need for measures to kick-start the slowing economy, Surjewala tweeted: “Let’s wait to see if govt/RBI will initiate measures to tide over.”

The “cracks of the credit crunch spread far and wide” and even cost of funding for non-banking lenders has risen, making the situation worse.