An Important Policy Change Required After Covid-19

Indian Companies and Debts: over the period, the Indian companies have become been living on high debts. It had become almost a way of running successful business. The annual interest burden of almost all companies kept on increasing. The debts taken by even the profit- making companies from the banks kept on increasing and in process banks became very much loaded with increasing percentages of NPAs pushing them nearer to bankruptcy. The influence of politicians in keeping on influencing banks to grant loans to such companies continued. Many of the companies followed even unscrupulous methods and influences to keep on running this way. Those are some who came in news when they managed skip to safe havens….Mallya, Choksi, Modi, …thousands of them. How many of us knew before this news report that RIL, the biggest company of India with the richest man of the country and perhaps Asia heading it was the highest indebted company. As reported, ‘RIL is India’s most valuable listed firm, with a market capitalization of Rs 9.25 lakh crore. It is also one of the highest indebted companies in India, with a gross debt of over Rs 3 lakh crore, and net debt of over Rs 1.5 lakh crore. Interestingly, it is also one of the most cash rich companies with over Rs 1.3 lakh crore cash in hand. ‘ However, in August last year, RIL Chairman Mukesh Ambani said he has pledged to make the company a ‘zero-net-debt’ firm. And now Reliance Industries Ltd, on a quest to become a net-zero-debt company, has announced to go for a rights issue of equity shares in its board meeting on 30 April 2020. The debt is not legacy of our country. The practice has been highly denounced in all our ancient scriptures..except for Charvaka, who talked of ऋणम् क्रियेत्, घृतम् पिवेत् ।

This lock down of Covid-19 has revealed how poor is our business system, where the companies or industrialists do not create a good enough contingency fund that can take care of such situation. But look at the reality, all the business men and company heads who have appealed to the government that they can’t pay their grassroots workers and other employees, must be having the same luxurious living styles that were having before the suspension of the business because of this global calamity called Covid-19. Will our popularly elected government and Indian policy makers take some lessons and bring forth some mandatory provisions to meet such emergencies?

We, as retired persons with no fat pensions or any other incomes but the savings of years in bank FDs with every six monthly decrease in interest rates are ready to keep the household workers away from their work, paid on humanitarian ground. I wish all rich persons, if they expect respects from the common people, will change their attitudes, so that the welfare democratic state like India don’t go in mesh and become sick economy. All these people must take of millions of people who have turned destitute so and not exploit them by forcing them to take loans at huge risks from unscrupulous money lenders.

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