The victory of the Australian Labour Party – which has promised to veto a prospective Federal government to the Adani group – is bad news for the company.
A new ordinance will stop a majority of promoters from bidding for their own stressed assets, but may result in lower revenue for lenders.
Even as China has swooped in to save the day, critics claim that the project is financially unsustainable and will only work if the risk is shifted onto Australian taxpayers.
While the government needed to kick-start growth and private investment, it is absolutely essential that promoters of defaulting corporate groups don’t end up laughing all the way to the bank.
While firms in the FMCG and auto sectors have done well, certain power, steel and telecom companies – where access to natural resources and political connections are crucial to success – have performed horribly.
If the finance ministry is serious about restoring the health of the banking sector, it cannot afford to discriminate between those that won coal blocks and spectrum during the NDA rule and the other defaulting companies.
J.S. Deepak’s transfer may have been prompted by his conflict with Reliance Jio and TRAI and reflects poorly on an already controversial, crony capitalism-prone sector.
Three years ago, the US indicted Dmytro Firtash and Congress MP K.V.P. Rao in an $18.5 million bribery scandal involving mining in India. Why has India not investigated the offence yet?
The RBI governor’s no-nonsense attitude in dealing with debt default did not go down well with the big business interests, leaving the political class feeling uncomfortable and insecure.
Finance Minister Arun Jaitley made a counter argument that India’s economy is far more resilient today than it was in 2008. He probably knows, not many in Davos would have agreed with him.