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Andy Mukherjee

India Needs a Mega-Bailout. Here’s How

The funding woes of shadow banks have kept worsening. This is one possible blueprint to restore confidence.

Much construction debt is on shaky ground.

Much construction debt is on shaky ground.

Photographer: Kuni Takahashi/Bloomberg

Another shadow bank in India has missed a bond payment. That's a reminder to the new government that a mega-bailout of the country's distressed financial industry is now unavoidable.

Ever since the collapse of infrastructure financier-operator IL&FS Group in September, an event I termed India’s mini-Lehman moment, the funding woes of the country’s nonbank lenders – those that operate without state-guaranteed deposits or access to central-bank liquidity – have kept worsening.