The Indian Economy is going through a tumultuous phase. The new sets of challenges it is encountering today were never factored in its unencumbered journey so far. The GDP growth is down to 5.7% in the first quarter of the current year. Prominent reasons for the slow down in the economy in India seems to be: i) The prying eyes of the State are in action now. Especially on the issue of black money. ii) Almost total absence of high level corruption. However insidious it is, it provided money, primarily for the real estate sector. Huge inflow of sleaze money had in fact created a bubble. This sector, which employs the maximum after agriculture, has now gone into a virtual limbo. That money also created conspicuous consumption driving the juggernaut along. It has now, suddenly come to a standstill. iii) There is now a considerable amount of vigil on the Companies. Until now, most adopted dubious means to divert public profits to private personal accounts of the promoters. Many knew business only by deceit. By cutting corners on taxes. They are now finding it hard to play by the rules. iv) Demonetisation. Unlike many other countries, India is a place where majority of the manufacturing of parts and components is done at small and micro units. Most, run on cash. Salaries, transporters, purchases, all in cash. With the abrupt shortage of currency these were left gasping for breath. Poor workmen, who had just returned from their native places after Diwali, once again proceeded back. Upstream orders too are diminishing and payments delayed. These units, therefore are caught in a vicious cycle. A few downing shutters, while others - just chugging along. v) Crackdown by the ED, Income Tax on many businesses and traders for evasion. vi) Until now many businessmen had a slew of bogus front companies registered just to siphon off money through a web of many such entities. The department of Company Affairs and the ROC, after years of conniving silence finally have woken up from their deep, contrived slumber. Three lac such Companies, which did not file returns, balance sheet, p/l accounts have been shut. Inquiries against about ten thousand initiated. Under such circumstances, it is but natural that many cannot now no longer continue to milch the system as before and are busy in cleaning up the mess. vii) Indian banks, especially those in the public sector, are saddled with a NPA of about a whopping Rs Ten lac crores. The top ten clients amongst themselves are not returning Rs Two lac crores. It had become a practice until recently, that even defaulters kept on getting additional credit and rescheduling of loans. Finally this party with depositors' money is coming to an end. Now with the introduction and enforcement of the Insolvency and Bankruptcy Code 2016, the RBI alongwith the commercial banks can and is compelling them to sell assets for repayment of loans. The Company itself can be taken over by the banks and run by professionals before being auctioned away, if necessary. All such activities are sending shivers down the spine of the top 500 defaulters led by Ruias of Essar at Rs 75,000 crores. Lenders finally forced it to sell Essar Oil alongwith its refinery to Rosneft of Russia for about 13 billion dollars. It is procrastinating through Courts on the sale of Essar Steel but will have to eventually yield. Mayawati's favourite, Jaypee group of Taj Expressway, was forced to sell its Cement Plant to Birlas for Rs 16000 crores. Its land bank valued at Rs 13,000 crores too has reportedly been taken over. Other prominent defaulters are Congress favourite, Jindal Steel and Power, besides Videocon of Dhoot, a one time Shiv Sena Rajya Sabha MP, Bhushan Steel, Kingfisher Airlines etc. The notorious Sahara group too is being made to face the music by SEBI and the Supreme Court. To recover Rs 25,000 crores, its ulta luxurious Amby Valley project spread over 17,500 acres near Lonavala is now under the hammer. Other Chit funds too are facing similar fate. Government Financial Institutions and the Judiciary are now taking strong action against cheats & fly by night operators. viii) Until now many traders managed to avoid the tax net and hence could offer discounted rates benefitting all, except the Government. With the GST in place they too will have to register and pay. This too is slowing the unhindered run at the cost of the State. It is therefore evident that if more than half of country's businessmen are under the scanner, the decade long free run of growth is bound to be affected in a major way. This stage has come because of total negligence and entrenched corruption of the past few decades. This cancerous bubble would have anyway eventually burst. Some one had to take a call to run the businesses and trade in this huge country in a clean, honest manner so that the country and its people are not cheated of their due returns by a few thousand scoundrels. This house cleaning will finally produce good results in the long term for everyone. For the time being, slowdown is imminent. It is hoped that the Government will sieze this opportunity to introduce radical reforms to unleash the immense enterprising spirit of the entrepreneurs. Decadent labour laws need to totally revamped. The multiple obstructions like licences, permission and NOCs must be drastically curtailed. Industries must be freed from the stranglehold of the local mafia. Including political and bureaucratic. Today, sadly, India ranks an abysmal low at 120 out of 170 nations in the rankings for the ease in starting and doing business. If the Prime Minister, Shri Narendra Modi's dream of Make in India is to succeed then this picture needs to change immediately. Otherwise his fond dream will forever remain an elusive chimera. He certainly wishes that the future remembers him as a Patriot who changed the course of the nation's history. He therefore will surely wield the stick with an iron hand. His tryst with the country's premier post will be a legacy he will be proud of.
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