How Modi won India's elections but paralyzed the economy

Since the turn of the 20th century, the Godrej family has made bank safes. Now called Godrej Security Solutions, part of the sprawling Godrej business empire, the company is a bellwether for the state of the Indian economy. When banks are confident and expanding their branch networks out into the countryside, they need safes and other security equipment.

For the last three years, business has been slow. "For every 100 bank safes we used to sell, we are selling 20 now," said Jamshyd Godrej, the company's chair and managing director.

India's banking sector, and public banks in particular, are groaning under the weight of nonperforming loans. NPL ratios have more than doubled over the past five years, and the debt issues have infected the immense shadow-lending industry, causing a huge shortage of credit. A central bank-backed plan to expand financial services to rural consumers -- which should have been a boon to Godrej Security Solutions -- has stalled, while the removal by the government of many bank notes from circulation has further dampened demand.

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