Fraud and repayment failures appear to be the flavour of the financial news these days. The system is still reeling from the IL&FS and Dewan Housing mega-failures only for wind power major Suzlon to default on a $172 million bond issue and Punjab and Sind Bank to report a Rs 238 crore fraud involving Bhushan Power. Zee and Jet are still struggling to find buyers. Cases are stuck in the insolvency process. What’s next? Is India Inc in for a bigger shakeout than we’ve bargained for? And have our institutions responded adequately? The Insolvency and Bankruptcy Code, for one, was supposed to be a critical tool in managing business failures. But as Somasekhar Sundaresan argues here a law that was meant to enable smooth and non-stigmatised death of corporates has been transformed into a tool of actually stigmatising business failure. Talking of debt and indebtedness, the Budget announcement that the government would borrow abroad is freighted with issues that are not in the sovereign’s control.
Former Reserve Bank of India Governor Y V Reddy sets out the risks here. The opinion pages also look at the consequences of taxing the rich, India’s future demographic shocks and India’s failing export performance. Kanika Datta sums up the views.
Prime Minister Narendra Modi recently spoke of expanding the size of the economic cake, signalling his government prioritising of growth over redistribution. But the arithmetic of the Budget contradicts this spirit by imposing punitive levels of taxation on the generators of wealth – entrepreneurs, CEOs and CFOs, says Dhiraj Nayyar, Vedanta’s chief economist. Read it here
The declining sex ratio points to behavioural regression, especially among sections of India’s affluent educated population. Though schemes like Beti Bachao Beti Padao has utility among the poorer sections, there is an urgent need for messaging targeted at more sophisticated audiences so that India regains some measure of demographic balance, says the first edit. Read it here
Exports have become a drag on growth instead of being an engine of economic expansion, and there is little scope for optimism. This is an issue the government surely needs to address with some urgency says the second edit here