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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



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