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amounting to 18.4 billion were listed
on the small and medium enterprises
(SME) platform of the BSE and the NSE.
Resource mobilisation through qualified
institutional placement (QIP) declined
sharply to 102.9 billion in 2018-19 from
672.4 billion in 2017-18.”
According to this report, Net resource
mobilisation by MFs declined by 59.6 per
cent to 1,097 billion in 2018-19. Resource
mobilisation through equity-oriented
schemes declined to 1,080 billion in 2018-
the concerned officials and RBI in most The half-hearted 19 from 1,711 billion in 2017-18, mainly on
of the cases is unable to detect the fraud account of lower investments by individ-
through its own investigation. The misu- efforts of successive uals and corporates during 2018-19 than
tilization of funds by the banks and NB- a year ago.
FCs comes to light only when they vol- governments over the Primary market resource mobilisa-
untary disclose it after keeping it under years have directly or tion through public and rights issues of
carpet for long. equity increased significantly by more
The financial scams have exposed the indirectly trapped the than eight times (y-o-y) during Q1:2019-
clandestine understand of the authori- rural unskilled labour of 20 on account of higher resource mobi-
ties and the fraudsters because CBS (Core lisation by telecom companies through
Banking Solutions) technology provides our country in poverty rights issues. QIP issues declined by
a complete transparency in the borrow- and backwardness for 16.3 per cent during Q1:2019-20. The net
ing and lending and leaves no room for resources mobilised by MFs declined
discrepancy. In the case of PMC Bank it generations significantly by 86.8 per cent during
has been revealed that the many transac- Q1:2019-20 primarily due to decline in
tions were not uploaded in the CBS and These two perceived game-changers hit net inflows in money market MFs.
RBI could not track the corruption in the the fragile economy with very bad con-
urban cooperative bank. sequences. The excessive centralization Where does the solution lie
According to the RBI Report, small of power in political decision-making is An evaluation of different sectors of the
frauds of amount less than Rs one lakh also factor behind the economic calam- economy explains that a constellation
were just 0.1 per cent of the amounts ity, the country is exposed to. of different factors are interplaying with
involved. each other to make the slowdown deep-
The amount siphoned off and drained Capital market er. There is a discourse going on among
out by the large borrowers could have The Annual Report of RBI (August 2019) the experts on whether this slowdown is
saved hundreds of SME (small and me- provides insights into ailing capital and cyclical or structural. For the time being
dium industry) clusters scattered across money markest, this is a significant it is assumed to be cyclical; hoping that
India who are grappling with working indicator of sliding faith of investors simultaneous interventions by the gov-
capital requirement. The investment in and bleak investment prospects. The ernment on demand and supply will pull
micro, small and medium industry can report says, “The primary segment of the the economy from mare’s nest.
prove to be a big demand driver and em- equity market exhibited lacklustre activ- The Government needs to fire on all
ployment generator. ity during 2018-19. Resource mobilisa- cylinders to rescue the economy from
The unused army of workforce in ru- tion through public and rights issues was the worsening economic growth. With
ral areas can be absorbed in SMEs with higher in the first five months of 2018-19 clear warning bells from international
resorting to urban migration. The SME on a y-o-y basis; however, it moderated and national agencies, it is time to chan-
clusters are generally located in suburbs substantially from September 2018 on- nelize the resources where maximum
due to viable land cost , thus utilise the wards on account of heightened un - returns can be accrued in minimum time
redundant semi-skilled man-power with certainty and volatile secondary mar- period. A quote by Albert Einstein “The
costing much for their rehabilitation. ket conditions. Resource mobilisation significant problems we face cannot be
According to Raghuram Rajan, former through initial public offers (IPOs) and solved at the same level of thinking we
RBI Governor and a noted economist, rights issues declined by 82.7 per cent to used when we created them” fits the cur-
“ill-conceived demonetization and the 182.4 billion during 2018-19. Companies rent situation.
poorly executed GST roll out” are the two mobilised a total of 160.9 billion through
key reasons for the current slowdown. 123 IPO issues, out of which 110 issues letters@tehelka.com
tehelka / 15 november 2019 34 www.tehelka.com