Even amidst the rising speculation regarding the statements made by American President Barack Obama during his State of the Union Address, India has something to cheer about. President Obama’s concern over India’s rapid growth is a testament to the change that the country’s economy has seen over the last few years.

India, which was long seen as an under developed nation, is finally being mentioned in the same breath as Germany, China and some of the other nations which have gained considerable economic growth over the years. Post the economic meltdown, the world expects different things from India.

Economists agree that there has been a slow but steady power shift towards Asia and with this shift of power, India’s prospects look very bright. It is expected that the new trading bloc that is emerging in South East Asia will soon sideline the US and Western Europe. The balance of pwer has been tipped in the favor of the Indian subcontinent and the new India is arriving now.

Even as economists of the world look towards India optimistically, statistics say that all is not well. The credit outlook for most Indian banks remains negative after the changes made in January earlier this year. Though the fundamental credit outlook was stable, the economic conditions still remain challenging and the number of problem loans or ‘bad’ loans still continues to be on the rise. Of course, the result of all this is an adverse effect on the quality of assets.

It has been estimated that even in the next twelve to eighteen months, things are not going to change for the better. There are no optimistic projections for the next year or two. The public sector banks, which make up the majority of the banking systems and assets, continue to hold a strong front. The concern for the deteriorating asset quality still looms large.