Common man bears the cost of wilful default as promoters destroy wealth

Opacity and lack of regulatory compliance is high among such promoters

The money siphoned off by wilful defaulters — if put back into the economy — could have been enough to fund various social welfare-related Budget allocations, argues the 2019-20 Economic Survey, and highlights promoters’ use of related-party transactions (RPTs) and removing assets to destroy wealth in economy.

“Every rupee lent to a wilful defaulter constitutes an erosion of wealth,” the Survey states and raises concerns on rising number of such defaulters since beginning of the current calendar year. 

“Rich businesses that want to get richer use wilful default as an instrument to redistribute wealth away from the poor,” the Survey