February 2020

SUBHASH CHANDRA : TO HELL AND BACK

THIS is another face of capitalism, albeit an ugly one. But it is as much an inherent part of the various moods and hues of ideology. Large companies, on the brink of bankruptcy, are trying to make last-minute deals to remain profitable, or survive. But if the logic of capitalism is that the government has no business to be in business, and the private sector should run to the policy makers to be bailed out, there is only one way – keep your head above the water, or declare bankruptcy. After the Supreme Court forced the telecom companies to pay their huge dues on revenue-share to the government, this is, in fact, the way forward for several reasons.
The first is that this trend is not sector-specific. Across segments, and across size-brackets, companies are in trouble. Some of the biggest names such as Jet Airways, DHFL, IL&FS, Bhushan Steel, Essar Steel, and several others declared bankruptcy, and were sold off – often at huge discounts, or haircuts on the outstanding loans. The same rules should apply in all sectors, and telecom cannot be any different. Let Vodafone-Idea fail if it has to. In future, even if the largest Indian enterprises are on the verge of loan defaults due to burgeoning debt, they should be allowed to fail, and then rise from their ashes like a phoenix.