So India is no longer the flavour of the season in Davos. Is that a surprise at all? Why hold only the government responsible even if they do take the major blame. Companies have hardly acquitted themselves well and the judiciary has also contributed its share of irrationalism.
Take the SC decision where 122 telecom licences were cancelled one fine day in one fell swoop. This decision was one of the worst exercises of judicial dictatorship in recent memory. Certainly there seems to have been corruption in the grant of these licences, and both the bribe giver and the bribe taker need to be taken to task. However, foreign investment into these companies came only after the licences were granted. For sure, the companies put in the funds after the licences were awarded. The cancellation of the licences badly affected the credibility of India as a stable investment destination.
The 2G losses were arrived at by CAG based on the very high premiums these companies paid Are we going back to the heady days of Indian socialism where the Controller of Capital Issues decided what premium a company inviting investment can charge? If high premiums are a criteria or wrongdoing, then every single investment into the e-commerce sector would be suspect.
Cancellation of these licences where nothing was started, and no further investment had been made would perhaps have been justified, but to disrupt entirely companies which had already started operation, which included companies like Loop Mobile which already had ongoing operations, or those companies which has already made heavy capital investment was ridiculous to say the least. What the court should have done is to direct the government to auction these licences and reallot them fairly. Whichever company won the licences could then have taken over the investments made and assets created by the earlier allotted companies which would have gone a long way in assuaging the concerns of the foreign collaborators.
Banks have bad debts, and they have accumulated to very high levels. There are many reasons for this. Some of it, like in the case of Vijay Mallya is corruption. Other loans have become stuck because infrastructure projects has been held up mainly because of land acquisition issues. Some loans have become stuck because of diversion of funds. Real estate project loans are stuck because markets are down. So it is not just one reason and each loan needs to be handled accordingly. Making a huge noise about it is self-defeating. It does not make any sense to make statements which bring down the entire credibility of the banking system and all the borrowing companies.