<p style="text-align: justify;"><span style="font-weight: 400;">If the events unfolding in national media over the last few days have felt like watching a rerun of the same old tragic show, then that’s hardly surprising. It seems as if there is absolutely no shock value left in the revelations that point towards major defrauding of Indian banks by Nirav Modi and Rotomac. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">These telling incidents have been recurring thorns in the Indian economy, and also serve to fan the flames of a simmering political blame game. And this is where the common man is being misled by false propaganda.</span></p>
<h2 style="text-align: justify;"><b>Steering Clear of the Mud Slinging</b></h2>
<p style="text-align: justify;"><span style="font-weight: 400;">While the Indian banking system rightly deserves its fair share of the blame in light of its recently exposed inadequacies, it is appalling to see many pioneering conglomerates being mentioned in the same breath as the defaulting companies. It is common knowledge that, over the years, many Indian powerhouses such as Reliance and Tata have acquired huge loans from banks to further their enterprises. But that doesn’t mean that they are cut from the same cloth as the fraudulent firms in question – something which malicious propagandists in the country don’t want you to know.</span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">At the end of the day, a strict line has to be drawn between companies that are defaulting on their loans and companies that never have. Don’t let the widespread notion that equates the figure of the loan with the propensity for defaulting fool you. </span></p>
<h2 style="text-align: justify;"><b>Understanding that Corporate Loans Drive the Economy</b></h2>
<p style="text-align: justify;"><span style="font-weight: 400;">Perhaps it is time to bring back our forgotten economics textbooks from the closet. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">Truth is, credit is the most important part of an economy. It allows businesses to invest beyond their cash reserves and establish the infrastructure that fuels economic growth. The bigger the loan, the more a business can spend, and the faster it can build the nation. Moreover, the high interest that corporates are charged on their loans is what ultimately trickles down into the burgeoning coffers of the bank, thus strengthening the GDP.</span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">Yes, stricter banking measures are necessary to correctly allocate heavy loan amounts to the right candidates. But to put the entire loan system under the eye of suspicion misguided by incorrect and inflammatory WhatsApp messages will only serve to jeopardize the entire Indian economy.</span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">Yet, certain politicians are comparing two completely unrelated issues, i.e., the extent of corporate loan debt in the country with </span><span style="font-weight: 400;">farmers’ loans</span><span style="font-weight: 400;"> in order to create another political controversy in the Rajya Sabha. It’s deplorable that amidst the eye of the storm regarding recent bank scandals, it has become so easy to take advantage of the layman who barely understands our financial institutions and processes. Hence, we need to keep our guards up before giving in to malicious opinions.</span></p>
<h2 style="text-align: justify;"><b>Making a Case for the Established</b></h2>
<p style="text-align: justify;"><span style="font-weight: 400;">As a result of misleading social media forwards and messages, an environment of uncertainty is being created in the country. What follows is economic destabilization and a shuddering loss of investor confidence in established companies that are pegged as drivers of the world’s fastest-growing economy. Over years, these conglomerates have created millions of jobs, built world class infrastructure, and whole-heartedly invested in the socio-economic development of the country. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">This is why we need to segregate fact from fiction and stand up for India Inc.</span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">The law in India makes it mandatory for companies to spend 2% of average net profits on CSR initiatives every year. However, the Tata Group, ranked as the 65</span><span style="font-weight: 400;">th</span><span style="font-weight: 400;"> most valuable brand in the world, maintains that value at a significantly larger 8%. Why? Because it is a brand devoted to the idea of a prosperous nation. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">Similarly, Reliance has created significant energy assets for the country and continues to push the boundaries of innovation and philanthropy to power India to the pinnacle of global economic dominance. There is the Mahindra Group that has operations in over 100 nations across the globe. Ultimately, the success of these brands translates directly into prosperity for the nation. This has been built on faith shown by our banks in providing them with loans against their considerable assets of national significance. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">And when it comes to building assets that will usher a new era of national socio-economic success, we cannot un-see the efforts of the Adani Group. From coal and power, to the largest solar and renewable energy plants in India, to the largest commercial port in the country, the Adani Group has repaid the investment in their vision with immovable assets that guarantee energy and food security for the country. They have a CRISIL rating of AAA+, which is considered the most stable investment and credit-worthy rating in the industry, and all their divisions enjoy a high credit rating from domestic rating agencies. Diving into numbers, if you had invested Rs.150 in the company in 1994, you would be sitting on Rs.1 lakh right now – such has been the phenomenal growth of this conglomerate that continues to attract major investors for its nation-building projects. </span></p>
<h2 style="text-align: justify;"><b>Facts Speak for Themselves</b></h2>
<p style="text-align: justify;"><span style="font-weight: 400;">Of late, unsubstantial claims by certain media groups and detractors against the Adani Group have tried to shake the very foundations of our nationally important corporate loan policies. Without facts, though, these appear to be only misguided opinions, because facts and numbers paint an entirely different picture. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">As anyone well-versed in economics would know, the singular critical test for debt is its regular servicing i.e. the ability to make payments on outstanding loans. This has been implemented meticulously and regularly by the Adani Group since its inception. It’s one thing to point at the amount of debt. But without other financial metrics of the Group, it’s only a half-baked story. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">Do we know that the Group’s dependence on PSU bank for long-term borrowings is less than 50% at about Rs.34,000 crores, and that it is regularly serviced? A true eye opener is the fact that, thanks to Adani Group’s implementation of capital-intensive world-scale infrastructure projects, the aggregate Net Asset Block of Indian operations stands at over Rs.1,10,000 crores. Moreover, the Aggregate Net Worth of the listed entities stands at over Rs.40,000 crores, with the aggregate EBIDTA pegged at Rs.24,000 crores.</span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">It is very well known that ports are the next harbingers of national economic prosperity. That the Adani Group’s Port and Transmission businesses have been rated ‘investment grade&#8217; by international credit rating agencies should be a matter of great pride for everyone. </span></p>
<h2 style="text-align: justify;"><b>Seeking the Truth</b></h2>
<p style="text-align: justify;"><span style="font-weight: 400;">In lieu of these facts, stopping the funds and disengaging the credit line to the abovementioned members of India Inc. is a foolhardy proposition. It is amidst this barrage of mud-slinging by political adversaries and malicious competitors that the public is advised to maintain discretion and not jump on the bandwagon. In a world of easily available misinformation and digital gullibility, we must remain informed. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">If there ever was a time to keep faith in the visionaries of the nation who have barely put a foot wrong in their nation-building initiatives and have never misappropriated the funds afforded to them, then it is now. </span></p>
<p style="text-align: justify;"><span style="font-weight: 400;">After all, only truth can power progress.</span></p>

Keeping Faith In The Real India Inc. & Corporate Loans
