VOX POPULI Issue No. : N 018

VOX POPULI  

by 

AAM ADMI 

Issue No. : N 018
Issue Date: 6th Feb 2023

Contents:

1. The Adani Mess-up with Postscript: The Finance Minister & The Finance

     Secretary Needs To Pull Up Their Socks

2. Changing Perspectives & Manufacturing Benefits

3. Re Problems With Indian Medications Abroad: Are We Safe In India?

The Adani Mess-up with Postscript: The Finance Minister & The Finance

 Secretary Needs To Pull Up Their Socks

The Adani stocks continue to take a beating as a consequence of the Hindenberg report on its operations. It is reported that the losses in the falling stock are near US$ 120 billion wiping out half the value of the Adani Group Cos. The surprising part of this story is that despite this massive impact our Secretary, Min of Finance has described this whitewash as a 'storm in a tea cup' and that it will subside in a few days. On what basis he is saying this is not understandable and which crystal ball he is looking into to make his prediction. Maybe he is saying this because in a short time Adani will have nothing more to lose! However, the lack of concern from the Finance Secy is stunning since government entities like LIC & SBI are exposed to the extent of Rs. 56,000 crores in the Adani Group Cos. The government and IRDAI have put out statements that the exposure of LIC & SBI are within the norms and are only to the extent of some 0.2%  of their total loan portfolios. The issue is not that but the risk of the government losing this money which is a substantial amount of public funds. We have seen how from Mallya to Choksi to Nirav Modi the government has failed to recover their investments since the pledged assets never compensate fully to the extent of loans taken and the process of recovery is cumbersome and time consuming. The RBI has again called for the banks to inform it of their exposure to the Adani Group Cos. This is a good step. Thus it is best that all banks and government investment entities have a mechanism of regularly monitoring their exposure to loanees with checks and balances on their operations and the quality of assets along with red light markers that will trigger a more exhaustive review. We have seen too many of financial failures lately and this is no time to sit idly by and watch things change for the worse like a spectator. 

Postscript:

The Finance Minister & The Finance Secretary Needs To Pull Up Their Socks

With the exposure of the State Financial Institutions like State Bank of India and LIC in the Adani Group of Cos. in the region of Rs. 57,000 crores, this is not the time for the above august personages to be blithe about the entire matter. The Finance Minister can say that India is too big to fail from the Adani collapse and that the two prime financial Institutions of the country are not overexposed in their loan portfolio to the Adanis, but the Rs. 57,000 crores is nothing to be ignored. At the same time the Finance Secretary can abstain from making vacuous and immature statements that the Adani meltdown is a storm in the tea cup. For the public it is important that the Adani exposure is secured and therefore the Finance Minister and the Finance Secretary should make concerted efforts to recover the money since it is the public that elected Nirmala Sitharaman to Parliament so that she could become the Finance Minister and the Finance Secretary's salary is being paid by the public which he needs to justify and do his job rather than indulge in innocuous statements.

Changing Perspectives & Manufacturing Benefits

The semantics involved in the presentation of the Annual Economic Survey and the Union Budget are rather amusing. There was a time when GDP growth expectations would be in double digit levels and one would be talking of 10-12% growth in a matter of fact manner. Thereafter we slipped and growth of 8-9% became the norm which qualified as normal. However, this year we see that 6-6.8% predicted for 2023-24 is described as robust growth. While just earlier during the Covid times we were fighting to maintain a growth rate of 7% and taking umbrage when the IMF, World Bank and other multilateral agencies were projecting an India growth below 7% against. But we are now taking the 6-6.8% growth as 'robust'! But in one sense it is good that our government is recognising the worldwide recessionary trends currently prevailing and settling for a reasonable growth rate. 

It was also said that the Budget presented for 2023-24 has nothing for the poor and the SME sector. As this information we have the redoubtable FM wading into the action and a headline in the papers saying that she will have a session with the BJP MP's to educate them on how the Budget benefits the poor and the SME sector. Another 'jumla' on the way! 

The other thing was that Nirmala Sitharaman while presenting the Union Budget in Parliament when she came to the phasing out of old, polluting vehicles stumbled with a slip of the tongue and said that she will 'replace old political ......' for '.....old polluting...'. Sometimes the truth has a tendency of slipping out!

Re Problems With Indian Medications Abroad: Are We Safe In India?

We have been lately having problems with our medications being found to be below par and not up to medical standards around the world. In Uganda & Kazakhstan there were reports of deaths amongst children after taking cough syrup made in India. The medication was being made by pharma Cos. near Delhi. The operations of these Cos. were then sealed pending investigation. There are now problems being reported from the US about eye drops from a Chennai Co. that have bacterial contamination as a result of which a number of people have lost vision and there has been one death. The contamination seems to be across different batch nos. of the medicine and after testing by the CDC on bottles that had been opened by users. Apart from the loss of face that India encounters, there is a greater concern as to whether whether the same medicines were being sold in India and whether Indian lives were put at risk particularly of children as in the case of the cough syrup incident. There is a saving grace that the eye drops are not sold in India. As much as the pharma Cos. involved and the government take these matters seriously when foreign countries report these issues, one is not sure if Indian instances are taken with the same import since the attitude taken is that the complaints are spurious and in any case Indian lives are cheap. This is being said since in the media one has not heard of anything about any cases from the cough syrup that happened quite some time back abroad. The Drugs Controlller needs to be seized of these matters and conduct enquiries against these pharma Cos.to make sure that Indian patients are safe.

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