How some enterprises have collapsed?

Nevertheless, structural reforms on a strong IT architecture implemented by the present government plugged the leakages, which were obviously unacceptable to “business” miscreants. They had their inevitable fall, yet with a calibrated space for revival, but in strictly disciplined ways. Only corrupt and crooked individuals could build their fortune from the corruption, nepotism, crony capitalism and open secrets of uncontrolled frauds
that characterised our economy.
In 70 years of self-rule, hence, five per cent of the population owned 95 of the country’s wealth. In the name of farmers welfare, politicians who claimed themselves farmers used to be richer. Local satraps became fattier. There was no system to track whether the extremely poor, who fed the billion’s mouth, breaking their bones in hostile weather, got their dues. Most Indians never had basic bank accounts until August 2014. Yet, every successive government used to talk about inclusive growth, roti, kapda , makaan, etc. The slogan repeated for decades, showing notorious inefficiency of the earlier government. Decades after the slogan, gharibi hatao was made popular, many villages reported and unreported poverty deaths, reminiscing the notoriously impoverished sub­ Saharan Africa.

Every business used to work according to the owners’ whims and fancies with the blessings of law enforcers and policymakers. Crony capitalism continued to flourish. If you have power to wield and money to spend, you can do even forbidden things liberally in any way you want. Many businesses and businessmen flourished by this equation and also by saluting the big men in the political capital. Thus the wealth was concentrated only in the chests of the blessed ones. Resources of this naturally rich country were in the hands of those who knew how to satisfy the rulers and bureaucrats. However, everything ended suddenly in 2014, though everyone misconstrued that corporate biggies would become more powerful after Narendra Modi became Prime Minister. When most Indians had no deserving bank accounts, a fortunate few had enjoyed the luxury of hugely undeserving bounty of bank credits. This irony was rectified with the launch of the Jan Ohan Yojana in August 2014. Everyone knew the sad state of the seven-decade long story was altered only after the launch. By the time, the government run banks had lost 9 trillion out of 12 trillion lavished on them in five years between 2008 and 2013. A large portion of this money changed its colour into black and parked in shell companies.

By the year 2018, the government removed over a million shell companies from the register. Companies, which defaulted multi-billion rupees in repayment to banks, used to have several shell companies with even middle-level and last grade employees being “directors” on the board. Without business such companies also used to have money parked in their bank accounts. In the unbearable hot air of demonetization , many crooked entrepreneurs had to run for a cover. Side-by-side, the intense recovery process made their life tougher.

In 2014, the government and some experts diagnosed a huge tumor seriously plaguing the economy. Many of them in the know of the plague were reluctant of ranting the truth for fear of the historically long time ruler’s wrath. They never expected the people to reelect a party other than the party that ruled for more than half a century with full mandate. They, therefore, didn’t like to declare themselves supporters of the newly elected government by speaking out the truth. The disruptive technology began to work very well. The truth was so unspeakably bitter for media, think-tanks and the self-acclaimed intellectuals. The newly elected rulers kept the cronies faraway and shut down what was called the Luteyan’s Club. Nothing but only the truth worked ultimately . The once powerful lobby with immense media clout traded on the new data reflection, which is genuine, to call the powerful government a failure out of their frustration. With the support of information technology in assimilation of data and delivery of government bonanza, a true picture of the economy began to appear on the screen transparently. The truth began to began to emerge. While the system was being corrected, the government took some path-breaking steps in the process of radically revamping the economy. Quick revamping of the messy and heavily fraud driven economy left behind by the notoriously corrupt predecessor was a Himalayan task.

Building a good impression about the government’s  works with integrity was tough, as the voice of the frustrated opponents was even louder in the media. The process did not stop much to the discomforts of the “cronies” and salute champions. The government’s first hammer fell on the habitual bank looters in 2015, beginning with series of shockers and setting in place systems, which made each one accountable. Many of them, who habitually misused their clout to make huge gains in undeserving ways found their life in India becoming tough. In the past, the willful defaulters were rewarded with amnesty and settlements. Loan delinquents were given more loans in the name of restructuring. Bank loans were wantonly misused by influential businessmen in nexus with rulers. We had too many examples.

The government acted ruthlessly through the passage of IBC 2016, which could plug the whole of the same defaulters re­ owning the defaulted company with liabilities cut down by lenders in the name of restructuring. Such fashion has now ended casting shadow in the eyes some big men, who face tough actions now for their unremitting loot. Naturally, the influential forces would succeed in painting a darker picture of the economy, because of such tough actions. They are expected to castigate the government policies further. The media is dense with their cries. Those who were perturbed at the loss of their clout joined the chorus. However, the truth lied elsewhere.

Without bringing down the empire they built on fraudulently borrowed money, the government made a provision to find a suitor . That made the super-rich industrialists like the Ruias of Essar, the Singhals of Bhushan Steel, the Jiwrajkas of Alok Industries, etc exit their empire in unceremonious way, though they somehow wanted to stay on the board and in management. To retain the control on Essar Steels, the Ruias were compelled to outbid the final suitor ArcelorMittal Nippon Steel of L.N Mittal, but too late for the borrowers to listen to. The Singhals were accused of siphoning off 2000 crore bank money through 80 shell companies.

These willful defaulters used to enjoy the luxury of restructuring and lenders’ compromising deal in the past, which ended after the Bankruptcy Code (IBC 2016). The Gaurs of Jaiprakash Associates, the Dhoots of Videocon. These willful defaulters had never expected them to be out of their empire. The willful defaulters found no godfather in the new power circles, who had blessed them to loot smoothly for a decade. First time, Reserve Bank ordered commercial banks’ Asset Quality Review (AQR). The government enacted the Insolvency and IBC 2016 with stringent measures to deal with huge defaulters, in an innovative and in an unprecedented way.

The Act armed the lenders with stronger power and enabled them to sack the owners of the delinquent companies from the ownership, completely sealing even the backdoor to prevent their reentry. Where was this size of money, which should have worked out in the economy, stashed away? Necessary investigations naturally followed. The staggering lost loan meant an absolute blank of three­ fourths of the five years investments in the economy out of what commercial banks had lent until 2014. In fact, 9 trillion bank loan didn’t find their way into the economy. The money went off in various forms such as intermediaries’ “commissions” and lavish “fees”. By cash withdrawals and rooting through thousands of shell companies’ accounts the loans moved into safe havens. They thought they would continue to rule their business empire.

But their castles fell so abysmally that they couldn’t presume. The defaulted promoters were finally made to exit from the empire built on the overwhelmingly undeserving bank loans. The rules were made in such a way that even the shadow of their ghosts couldn’t come anywhere even in the faraway neighborhood. That marked the end of immoral nexus between the trapped lenders and delinquent borrowers. Demonetisation that came closely to the IBC 2016, also shattered their dreams further. The action was essential to trace and hunt down cash bundle hoarders and kill the black­ money fuelled business that thrived a parallel economy.

These also contributed to the pain of bulging tumors, which were kept apparently controlled by a virtual long­ drawn sedation. The tumors had to be removed fully through a radical treatment.