India's economic growth being held back by bad loans: analyst

New Delhi

THE recent arrest of Vijay Mallya highlighted the problem of bad loans in India, but analysts say the tycoon's unpaid debts are just the tip of an iceberg that is holding back the country's economic growth.

The multimillionaire owner of a Formula One team and founder of the Kingfisher beer brand was arrested on Tuesday in Britain, where he fled a year ago after allegedly defaulting on loans from Indian state banks worth more than US$1 billion.

From the mid-2000s onwards, Mr Mallya and much of corporate India went on a shopping spree, picking up assets both at home and overseas even as a financial crisis hit the global economy.

As a result, Indian banks are now saddled with some of the highest levels of bad debts in the emer…