Just yesterday, I had posted about how the ballooning billions in debt accumulat in India could be one unlucky snowflake away from an disastrous default avalanche.
Lo and behold! Along comes the reason why the oligarchs of India Inc. remain unfazed... The following news is from The Economic Times of 6 Dec 2011: Big borrowers of India Inc default on Rs 47,000 crore loans
The article opens thus...
Large borrowers, who took loans of Rs 10 crore or more, have defaulted on payments to the tune of Rs.47,000 crore, with banks not even pursuing cases to recover over half the amount.
Data available with the finance ministry shows that least 700 defaulters who had borrowed Rs.10 crore or more from public sector banks and cumulatively owe over Rs.26,000 crore have gone scot free despite not clearing their dues.
The article goes on thus...
In fact, in several cases, defaulters have gone ahead to get a second loan despite not clearing their past dues.
There is nearly Rs.14 lakh crore of credit outstanding against those who have borrowed Rs 10 crore and above! But, apparently, the banks are not in any hurry to get them to pay it back.
So India's genius bankers - when they are not helping out India Inc. with loans against worthless collateral or taking on hefty losses in the name of corporate debt 'restructuring' - are actually willing to let their 'friends' walk away from humungous loans with next-to-no consequences.
Oh, but there are consequences, to be sure... Not for the oligarchs, the banking elite or the traitorous political class. They get to hoard the profits, while their obscene debts are dumped on the nation (one step from a Moody's debt downgrade to 'Junk' status) and its citizens (one step from starvation and mass civil unrest) to pay up.
Look westward at imploding societies of Europe and the United States - NOW is the real opportunity to learn lessons on how (not) to run the economy.
A word of advise for those who live in ivory towers: The effette media-tamasha around Anna Hazare and his merry band of Rockefeller-Magsaysay awardees will be the least of your worries when the economy goes into debt-shock.
Just how many sten-gun magazines will your Z-triple plus category Special Protection Group have to empty to stop a 1.3 billion-strong juggernaut?
REMEMBER ONE WORD: KARMA