07

Dear Readers
Introduction: Bharatvasis celebrated the birthday of Lord Rama and his brothers Bharat,
Shatrughna and Laxman on 30th March 2023 with devotion and lighting throughout the
country at night resembling shining of the sun. Lord Rama was a Suryavanshi. His life gives
the message of an ideal king and husband, loving brother, obedience to parents, caring nature
for his subjects, respect for poor populace irrespective of their caste, a great warrior with
great leadership skills for the army. As the incarnation of Lord Vishnu as a human being on
earth, Lord Rama’s aim was to establish righteousness and ensure justice for all.
Indian Economy: Economy is slow. Private investment is not picking up. Worst is yet to
come in the global economy. The government has to act prudently by being investor-friendly,
considering the delays and defaults in the payment to the lenders. The consequences of the
global economy are becoming evident with the eruption of problems in the financial system.
The fall of the US Bank SVB (Silicon Valley Bank) recently is just one such example.
Government and lenders have to bear with the present situation. The founders and promoters
have witnessed several episodes of turmoil and destruction. Government and authorities have
to measure and regulate the hike in the rate of interest which spikes up cost of production
affecting the consumption demand due to rise in price. Global credit rating agency Moody’s
raised India’s economic growth rate for 2023 to 5.5% (estimated) from 4.8%. The upward
revision is due to the big capital expenditure envisaged in the budget FY23-24. India’s real
GDP growth has been pegged at 6.5% for FY24, according to the Economic Survey of 2022-
23. Moody’s expects global growth to remain slow in FY23. Forecasted by G20 economic
global growth rate will be 2% in FY23 from 2.7% in FY22 and will improve to 2.4% further
in FY24.
Advantage of India is that the economy is driven domestically by its large population. Export
is contributing little to GDP. One of the recent positive developments is the shift of some of
the investments to India which was earlier planned for China. Core sector’s growth at 7.8% in
January is significant.
PM Modi said that India is one of the fastest growing major economies despite global
challenges. Our nation’s age-old principle of “Vasudhaiva Kutumbakam” has now got
extended to the motto of G20 announced by India – One Earth, One Family, One Future.
FM has advised Public Sector Banks (PSBs) to be more vigilant and appealed to them to
diversify their deposit base. It is known that because of the global interconnectedness of the
financial ecosystem, in spite of having in place better risk management systems, it is not
possible to be completely immune from multiple external risks.
Let us take stock of the Finance Bill Amendment of taxing benefits on Long Term Capital
Gain on Debt Mutual Fund on or after 1st April 2023. It will affect the growth of Debt Fund

and will also shift the benefit of saving for dire necessity, emergency and liquidity more in
the hands of middle class people. It will leave less money in the hands of the people to invest.
The Global Trade Research Initiative (GTRI) also said that the Indian economy will be
moderately impacted by weak global demand and recession in large economies.
In view of them, how the economy will grow if private investment is negligible. History tells
how government investment in various sectors has failed. There was a phase of
nationalization, and now it has turned to de-nationalization. Alleged failures in private sectors
are coined with fraud or so. Asset monetisation of already completed infrastructure projects is
being actively pursued to generate resources for greenfield and brownfield projects.
Recently RBI has advised banks to set aside specific provisions for their exposures to the top
20 Indian conglomerates which face higher external risks. Almost all big business houses
have started the process of reducing their debts, and not going for greenfield projects or
expansion in anticipation of a prolonged phase of global uncertainty and regulations.
Infrastructure: Prime Minister Modi said that infrastructure development is the driving
force of any economy. It will help India to become a developed nation by 2047. Government
capex have increased by 33% in FY24. Government has been targeting `110 trillion
investment under government proposed National Infrastructure Pipeline. Government has
budgeted a capex of `10 trillion for FY24. With lot of improvement in the logistics sector,
there will be considerable improvements in the ease of living and doing business.
Even though various infrastructure programmes initiated by the government appear good,
their maintenance cost is very high. Movement by road is costly as compared to movement
by rail. The nation needs more hospitals and healthcare units, nursing and healthcare training
institutes, and low-budget hospitals for growth of domestic and overseas tourism.
Inflation: India’s inflation is related to food and fuel. RBI’s aggressive rate hike and
monetary tightening may not help to tighten inflation, but will result in stagnation of
production as capacity expansion will be muted due to high interest rate. Need of the hour is
to increase the food supply at moderate price. Indian population spends more than 65% on
food.
Start-Ups: A study covering 50 of India’s funded start-ups reveals that their EBITDA losses,
considered as a proxy for cash-burn, more than doubled in FY22, to `30,304 crore. Aggregate
net loss also shot up to ` 37,751 crore during the same period. At the same time, aggregate
revenues also more than doubled to ` 82,406 crore. How they will sustain such Net Losses,
when inflow of the capital has dwindled? Will there be delay and default in payment to the
lenders who, in turn, may declare them fraud with the support of so-called
consultants/auditors? We have already seen this disturbing trend growing in recent years. In
fact, veteran banker and CEO of Kotak Mahindra Bank, Uday Kotak, has highlighted the
need for a comprehensive review of the existing framework and rules for financial sector
resolutions by citing the sub-optimal results achieved in some of the recent cases.

Corporate/MSME Debt Scenario: There may be some ray of hope for the promoters who
have been suffering due to the inflexible attitude of lenders and Central Bank. Supreme
Court, in its judgement, ordered that the banks must hear borrowers before classifying an
account as fraud. This results in serious consequences for the borrowers and their families as
their inability to borrow in future has serious civil and social consequences. The natural
justice which is the basic law and democracy must be followed before declaring any account
as fraud.
Banks classifying accounts on the basis of independent forensic reports, even ignoring the
reports of statutory and internal auditors. External consultants should not be allowed to
submit forensic report without hearing the borrowers and taking holistic past performance
and analysis future performance considering the history of the industry and organisation. The
borrower and the lender should ideally be given an opportunity to refer the matter to a
committee comprising of one judge, one reputed business person from that respective field
and a retired banker like in Lok Adalat’s formation.
Conclusion: All Bharatwasis in government, politics, social workers, entrepreneurs, businessmen, and
others will have to work with the spirit of serving the Nation with integrity and hard work, without the
rules and regulations becoming roadblocks for them.