The Post-Budget Scenario and the IBC: Empty Vessel Sounds Much!

Posted on 26th July, 2024 (GMT 19:55 hrs)

The so-called “Amrit Kaal” Budget (2024-25) under the flawed leadership of the so-called “Vishwaguru” has arrived and has attracted quite a lot of speculation from all quarters. Most of the opposition leaders have called it a “kursi bachao budget” (save the throne budget), given the fact that the Budget has aimed to aid its political allies, lure its chosen crony partners and also follow the recursive pattern of “Lena Banking” (a la Ashok Wankhede⤡; sort of ‘only take, not give’ policy) that is characteristic of the all three consecutive “Modi” governments (though the third term can hardly be identified with a singular name in the context of the rejuvenation of coalition politics).

As if the Modi 3.0 (in case of 18th Lok Sabha this very proper name is missing), in its utterly unstable and fragile state of governance, is still trying hard to implement its complicit “na khane dunga” idea that makes the superrich richer, and the poor much poorer. In the conditions of constant infrastructural failures such as rails/road/highway damages, airport leaks and bridge collapses, unprecedented scale unemployment of multiple sections of the youth, the actualities as well as possibilities of hyper-inflation, the NEET-NET-UPSC scams⤡ ⤡, the utterly deranged state of the farmers and workers, heightened taxation of the middle class whilst leaving corporate tax out of the question, rising rates of wilful defaults⤡ (there is no mention in the budget of recovering the assets stolen by the superrich wilful defaulters, who are roaming around scot-free like the rapists⤡ belonging to the present ruling party: a washing-machine for criminals), rising bankruptcies⤡ and so on threaten the very survival of the present government only within a month of its reign.

It has failed, yet again, as it was well expected. Yet, it is behaving like nothing has happened, as if their government is still maintaining the erstwhile “status quo”! Even so, deep down, they are quite aware of what is about to come, when they would not be able to pacify everything once and for all only by dint of hired big crowd-gathering speeches and unmet empty promises in oblivious reckonings. They have to step down to save their face, which has been lost numerous times at a global spectrum.

Mrs. Sucheta Dalal from Moneylife has had shared her reflections just before the Budget was announced. You can view it as follows:

Budget Blues & Broken Promises: The Optics Are Wrong for Modi 3.0 VIEW HERE ⤡ (As reported on 19th July, 2024 ©Moneylife)

In the above video/transcript, one can notice how Mrs. Dalal is pointing out the specific issues of poor infrastructure, economic inequality/concentration of wealth, corruption in education etc., in order to expose the present government’s lack of viable optics that are necessary for a fully functioning democracy, having at its core the question of future sustainability of the nation. Thus, the present NDA front government is suffering from socio-politico-economic myopia, though they are talking about planning for the next 25 years through a spectacle of ridiculous pseudo-futuristic Azadi Ka Amrit Mahotsav (75th Anniversary of Indian Independence)

Observe the following paragraphs:

“The top 1% of people, comprising India’s super-rich, hold 53% of the nation’s wealth. The bottom 50% owns a miserable 4.1%, and over 810 mn (million) people survive on 5kg (kilograms) of free grain distributed by the government. This, in  contrast to the lavish wedding, created bad optics primarily for the government in power.”

“International media reports about the big-fat Ambani wedding also make it a point to mention how India ranks very low in world equality rankings. A UNDP report of 2023 says, a third of all poor people in the world live in South Asia (389mn), of which a significant number is in India.”

What does the Budget say to resolve this? Nothing at all.

Before going to interpret or further discussion, let us VIEW THE FULL TEXT OF THE FINANCIAL BUDGET 2024-25:

A few points deserve to be separately emphasized in this context:

1. The astronomically increasing external debt during the period of 2014-24 has led the Indian habitat to have become a victim of pre-‘debt’-or, savage cannibalistic capitalism (two monopoly cronies AA, discharged jailbirds, i.e., wilful defaulters and the three terrorist & extortionist organisations: WB, WTO, IMF in the background). Even if we concentrate on the external debt-GDP ratio, we will be deceived by the data paucity, data opacity, data denial & data manipulation in the context of contemporary Indian corpus-bank. Cannot we constitute a green “Debt Bank” to keep all the NPAs, defaulted money etc.? Money Laundering by the Ruling Party of India: An Open Epistle to the Financial Action Task Force (FATF) VIEW HERE ⤡; How Do We Have So Little in Our Pockets Given That The Few Have So Much Money? VIEW HERE ⤡
2. The repeated emphasis on ‘dole economy’ would not be able to sustain itself in the long run. It is a very fragile tool for winning the elections and alluring the masses. The existence of the trickle down economy along with large scale legitimized and normalized corruption are all elements of a critical dangerous signal for what the future India holds for its common citizens.
3. The term ‘eco-system’ is now arbitrarily used anywhere in the given text. This leads to the ‘fallacy of misplaced concreteness’ (a la Whitehead). The discourse on ‘real’ eco-system (in its denotative meaning) is at stake and in oblivion or better to tell it as a foreclosure (psychosis) at the time of the almost irreversible consequences of anthropogenic glocal (global+local) heating. We are really suffering from ‘boiling frog syndrome’. What we seriously need is sustainable retreat from developmental paradigm as preached by extortionist trio. One must take inspiration from the climate legislation and climate elections of Norway. If Norway can, why can’t we? However, Norway had started deep sea-mining after the elections. In our Budget also, lip-services are given to such a state of climate change in a few lines only in talking of a “taxonomy of climate finance”.
4. Let us talk of another aspect of the issue of “unemployment”. The strange buzz word ‘AI’ (by totally forgetting the opposition of Artificial Intelligence by thinkers such as Searle, Penrose and Dreyfus) is another name for unemployment since total automation renders humans entirely jobless. Moreover, the non-biodegradable AI-gadgets are not at all eco-friendly in any sense.
5. The draconian Insolvency & Bankruptcy Code (2016; multiple times amended) brought forth by this government in its first term has made the DHFL FD and & NCD-holders mere guinea pigs in the animal farm of the Orwellian state. The masters of the DHFL insolvency once said that “it is a test case”. Phew!

DHFL Victims in the Laboratory State of IBC: “Litmus Test”?

Tale of a Guinea Pig Colony

Regarding point (5), it is worth noting that the present Budget speech does mention it four times. See below (pp. 11-12):

Integrated Technology Platform for IBC eco-system
59. An Integrated Technology Platform will be set up for improving the
outcomes under the Insolvency and Bankruptcy Code (IBC) for achieving consistency, transparency, timely processing and better oversight for all stakeholders.“(emphasis added)

(…)
National Company Law Tribunals
61. The IBC has resolved more than 1,000 companies, resulting in direct
recovery of over ` 3.3 lakh crore to creditors. In addition, 28,000 cases
involving over ` 10 lakh crore have been disposed of, even prior to
admission.
62. Appropriate changes to the IBC, reforms and strengthening of the
tribunal and appellate tribunals will be initiated to speed up insolvency
resolution. Additional tribunals will be established. Out of those, some will be notified to decide cases exclusively under the Companies Act. (emphasis added)

Regarding point (59), it could be said by performing a discourse analysis that the mention of “improvement” entails previous faults, flaws and shortcomings in the implementation of the Code; whereas at the time of conceiving the code, the BJP government said in effect that the IBC is the singular omniscient and omnipotent code that is capable of rendering justice to all the creditors/stakeholders in the case of bankrupt companies entering insolvency. On the other hand, the Dewan Housing Finance Corporation Limited (DHFL) scam⤡⤡ saw how this was far from being the case. The CIRP thoroughly lacked transparency, consistency and a lack of oversight for benefitting all the stakeholders. We have already exposed these points in our previous articles (View “See Also” section at the end of this article). This further entails that the IBC was/is still in its embryonic stage when it was implemented on the DHFL by wasting huge public money.

Regarding point (62), the same thing could be said. The IBC is full of gaps and incoherent inconsistencies that threaten invested public money at the time of all-pervasive disinvestment/privatization. This point also makes an allusion to the Companies Act. Hence, the IBC cannot stand on its own toes and needs its help from other corresponding, co-existing laws/acts.

Will all these supposed “changes”/”rectifications” be implemented in retrospective effect, i.e., to all the previous cases that were hastily and unaccountably treated under the IBC, e.g., the DHFL scam? Who will compensate for the gigantic errors committed by the learned Draft writers of the IBC in 2016?

As a whole, reflecting on this Budget makes us agree with Sandeep Manudhane, who said:

“The taxation being done in India is like Europe, but the governmental services/facilities being provided in return are like that of Sudan. India’s top 1% has become rich like the top 1% of America, while the rest of the population are poor like the poor of Zimbabwe. The employment opportunities for the youth in India are worrying like that of the youth in Yemen.”

SOURCE: Listen to 08:41—-14:40 minutes for Sandeep Manudhane’s comments on the Budget:

Looking at the whole scenario before and after the Budget (2024-25), our demand is to:

1. Scrap the ill-conceived IBC in retrospective effect and frame an entirely brand new Insolvency and Bankruptcy Law without favouring any cronies;
2. Eradicate the concentration of wealth through default taxation;
3. Introduce Green Debt Banking, keeping in mind the anthropogenic glocal heating, or what is commonly known as global warming or climate change.
4. Emphasize on public sectors instead of indiscriminately selling/disinvesting government enterprises (due to the existence of the Orwellian state, privatization means “atmanirbharta”! What a tragedy!). It is inevitable in the context of the control of debt by the international extortionist trio; though there are empty spaces/vacancies in the government jobs, the present government is least bothered about public sectors;
5. Issue Red Notice and Arrest all the superrich wilful defaulters without any political favour;
6. Commit to a close monitoring of infrastructural innovations keeping in mind the conditions of the ongoing climate crisis, giving rise to changing landscapes and topographies. The dilapidated infrastructures are the results of political donations by the contractors.
7. Emphasize on skill-based, future-oriented disaster management-centric education that takes into account the disastrous situation of the natural world. It is also to be noted in the celebration of Azadi Ka Amrit Mahotsav, there is no substantial mention of climate emergency with long-term blueprints for action and mitigation efforts. Even though PM Modi had talked of “pro-planet measures” through “LiFE” (LiFEStyle for Environment) in this regard, his regime is far from performing whatever he has said. Again, it was nothing more than an empty lip-service.

Hence, the Budget (2024-25) is just full of sound and fury that signify nothing for the common citizens of India!

SEE ALSO:

Scrap Ill-conceived Insolvency and Bankruptcy Code (IBC), 2016!

Incommensurability Amidst PMLA and IBC in the Context of the DHFL Scam

“Public Comments” on the Sic(k) IBC (2016) to the IBBI

If SARFAESI (2002) is there, why fluid IBC (2016) is applied to the DHFL?

Is there any one-to-one correspondence between Bharatiya Janata Party’s increasing assets and abrupt bankruptcies in India?

Of All the Superrich Wilful Defaulters, Why the Wadhawans alone?

Dear Mr. Ajay Piramal, Wanna become wilful defaulters following the path of 50+ super-rich business barons

Non-Applicability of IBC 2016 on DHFL Scam (with relevant documents for litigation)