The economy went through Samudrra Manthan in last few years. There is no Mahadev in Kalyug to bear the poison, which has come out before the intended amrit, hence we have to bear the same in form of subdued growth.
Bank lending to corporate is more or less without external influence which will result in lower future NPAs. Banks are better equipped to recover NPAs as IBC has brought fear among defaulters. Fiscal discipline including off-budget borrowing is reflected in the journey of inflation from double-digit to lower single digit. Subsidies are reaching targeted recipients more efficiently. Tax compliance has improved. RERA has cleaned up real estate sector. All these reforms have come with an adverse impact on growth but is worth bearing as it builds a stronger foundation for future growth.
Just as a few extra pinches of salt negate the effort of the chef in preparing the food, few actions have spoilt the taste for investors and entrepreneurs. Those few steps that hurt investor sentiment are: Levy of LTCG despite STT, Surcharge on FPIs, Minimum Public Shareholding norm, higher Margins despite lower volatility, suspension of derivatives settlement etc.
The Indian entrepreneur is Kalyug’s Abhimanyu. He is born in the Chakravyuh to not only fight the Kauravs (market and competition) but also with the Pandavs (lack of credit, high real interest rates, high tax burden, complex regulations, infrastructure bottlenecks etc).
It is important for Pandavs to support Abhimanyu to break the Chakravyuh. We must create the environment to accept genuine business failures.
Following steps, which by no means are exhaustive, are needed in totality and in rapid succession for a turnaround.
This story is from the September 2019 edition of Investors India.
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This story is from the September 2019 edition of Investors India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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