One of the structural problems is macro-economic, and has to do with the government's pre-emption of productive resources through the high fiscal deficit. This means that more and more resources are being funnelled to unproductive uses by the government, and even if it is being utilised productively, the return on such investment is abysmal. Over time, the deterioration in the fiscal position will inevitablyhave an impact on companies. For instance, a high deficit will lead to a pressure on the rupee. High real interest rates, too, are a result of the inordinate amount of government borrowing. But the more immediate effect on NPAs will be on account of the integration of Indian industry with the rest of the world. As a consequence of so many years of isolation, large parts of Indian industry are globally uncompetitive, with fragmented capacities and outdated technology. The ongoing churning process in Indian industry will lead to a shakeout in many sectors, with many firms going under. This will automatically lead to a rise in NPAs for banks and FIs. The fact is the pain from globalisation is yet to be fully felt, and Indian banks need to be prepared for that.