At the CII (SR) Annual Regional Meeting Chief Economic Advisor, Krishnamurthy Subramaniam, claimed that the economic growth in the last five years had been the best so far. He dealt at length over the Insolvency & Bankruptcy Code and to the quick decisions by NCLT. These have brought about dramatic improvements in recoveries of loans considered sticky and non-performing. In the next four days, the Supreme Court had dealt a severe blow: it quashed the stringent RBI circular against defaulters. Debt-laden companies in power, steel, coal and other infrastructure, a few of which had already lost control over their prized assets, now have the opportunity to retain control over these.
Already banks are severely impacted by the loan waiver schemes for agriculture implemented by several state governments and promises of these getting extended to the Centre. The SME sector has also been reeling under unviable debts. The one correction to check profligate borrowings by large borrowers, the IBC, is now nullified by the court’s intervention. Hopefully, the new government would rectify the procedural flaw and resurrect it.
Less government, more governance…
ANOTHER INTERESTING point was made at the CII meet by economist Anantha Nageswaran. He has a fascination for figures and his presentation was bucked with cogent and well-reasoned data. While I admired the broad contours of his presentation, I could not agree with him on his suggestion for the government increasing employment on its rolls. He pointed to the low number of policemen for a 1000 population far below the needs. This, of course, could be extended to the number of judges, doctors, sanitary workers…in our populous country. But this reasoning raises questions on several accounts.
The first relates to explosive growth in employment in the government. Second, the low productivity of government employees, with few exceptions. DMK under Karunanidhi opened the flood gates for jobs under the government without paying adequate attention to equipping them for the tasks entrusted. The result: a government job becoming a sinecure. There was a massive expansion of employment in the Electricity Board, Public Works, Transport …. His bringing in private colleges and schools under the government payrolls brought several lakhs more. Cumulatively we have today around 12 lakh under government employment in Tamil Nadu, the highest among states, related to population.
Post-1995, after the 8th and subsequent finance commissions, salaries, and pensions recorded steep increases. With increasing longevity, there is an explosive outgo on pensions to government servants. The result: salaries and pensions to the employees under the government today account for more than half the revenues of the government and this share keeps increasing.
This experience is also seen in the case of the Centre and other states as well. Remember Modi’s promise of less government and more governance? Especially in sectors like banking, with dramatic improvements in automation, information technology, ATMs, internet and phone banking and with the mergers, there is the imperative to reduce employment over different sectors of government.
Exploitative media barons
The 24×7 news media is notorious for an exploitative trait. In the initial stages, news television was in the government domain. It had certain norms like covering development news by liberal spend on sending crews for collecting news and information spread across the country. There was also a modest payment for private participants in the programmes.
The pioneer, NDTV, had decent norms with strong social content. Prannoy Roy and his team engaged extensively in several social issues like electrification of villages, cleaning rivers, coastal ecology, etc.
However, the approach shifted to infotainment and further deteriorated to shouting parleys. The Arnab Goswami circus continuously extended the limits of this cacophony. Political parties field media teams for participation in such shouting cacophony.
The TV media revels in this exercise for economic reasons. There is a lot of saving on the freedom fromtweaking the brains for selecting and spending on news coverage and on paying the participants.
Billionaire Kalanidhi Maran’s Sun TV group started this exploitation: working on the psychology of participants, especially from the business, for the publicity value of a TV appearance, most regional TV channels are gracious in not paying even modest honoraria for the expert participants. not just Sun News; this exploitation continues with Jaya TV, Thanthi TV, TV 18… The honorable exceptions are Podhigai and Puthiya Thalaimurai.
India second largest crude steel producer
The World Steel Association, which represents 85 per cent of world steel production, has ranked global steel producers. India was ranked second after China, pushing back Japan (104.3MT). All regions of the world except the EU recorded an increase though small over 2017. Asia led the pack accounting for over two-thirds the global production. Look how the European and American behemoths were pushed back by the populous, resurgent Asia.
