Yes, We can

The Economic Times     13th May 2020     Save    

ContextPost COVID-19, India by meticulous planning can not only soften the pandemic’s impact on the economy but also revive growth.

Changes that can be incorporated

Corporate Governance Sector

  • Political funding of corporates: Reduce Corporate Lobbying for getting loan from bank.
  • Improve integrity of accounting: Forcing business to make money by efficient running and not by overvalued acquisitions.

    Power Sector

    • Patronising power theft and power giveaways: it deprive power sector with 30-40% of revenue. 
    • Ripple effect: Bad loans, power cut in rural area which impact the agriculture production and functioning of agro-processing industry.

      Agriculture Sector

      • Replace inflated support prices for specific crops and subsidised inputs with investment in infrastructure.
      • Remove restrictions on farmers’ marketing freedom and giving them income support.
      • Cropping pattern should be changed according to climatic and regional conditions like sugarcane is more suitable in Bihar rather than Maharashtra.

      MSME Sector

      • Releasing of already due payment from Government through Trade Receivables Discounting System (TReDS) platform 
      • SEBI should order rating agencies to include TReDS platform as one of the parameters to encourage large companies.

      Corporate Bond 

      • Large Companies issue bond ???? NBFC subscribe to these bonds ???? NBFC provide funding to MSME.
      • Risk can be mitigated by dropping regulatory restrictions against trading of almost all type of bonds.

      Source of 20 lakh crore rupees stimulus package

      • Borrowing from domestic market and RBI, fund from global capital markets, sovereign guaranteed debt through SPV.

      Way Forward: India needs bold politics to realise this possibility into material reality.