{"id":27563,"date":"2018-10-23T14:48:46","date_gmt":"2018-10-23T09:18:46","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=27563"},"modified":"2018-10-23T14:48:46","modified_gmt":"2018-10-23T09:18:46","slug":"has-india-inc-s-debt-burden-eased","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/has-india-inc-s-debt-burden-eased\/","title":{"rendered":"Has India Inc.\u2019s debt burden eased?"},"content":{"rendered":"

Has India Inc.\u2019s debt burden eased?<\/a><\/p>\n

News:<\/strong><\/p>\n

    \n
  1. Article discusses about India’s incorporations recent indebtedness trends and \u00a0measures undertaken to resolve the crises.<\/li>\n<\/ol>\n

    Important facts:<\/strong><\/p>\n

    2. Though the overall economic trends are improving, the data from 1,197 NSE-listed companies describes the worsening \u00a0state of affairs of incorporations (Inc’s).<\/p>\n

    3. The companies are \u00a0busy dealing with debt problem, banks are busy in dealing with their Non- Performing Assets (NPAs).<\/p>\n

    4. Reasons for NPA problem and India’s Inc’s indebtedness :<\/strong><\/p>\n

    \u2981 The aggressive capex plans by companies, financed by the credit boom in mid-2000s.<\/p>\n

    \u2981 Companies took huge loans post-2008 global financial crisis but failed to pay the interest payments on these loans.<\/p>\n

    \u2981 This led to twin-deficit problem which led to prolonged economic slowdown.<\/p>\n

    5. The big picture on India Inc.\u2019s indebtedness : <\/strong><\/p>\n

    \u2981 FY10 to FY14 witnessed a fast pace of debt accumulation<\/p>\n

    \u2981 FY14 to FY16 \u00a0saw slowdown in debt accretion.<\/p>\n

    \u2981 FY16 to FY18 \u00a0again witnessed debt accretion inching up.<\/p>\n

    \u2981 The pace of debt accumulation was higher in core sectors such as infrastructure, power and telecom.<\/p>\n

    \u2981 The indebted firms are on the rise and the companies \u00a0with negative net worth have increased.<\/p>\n

    \u2981 \u00a0From 29 in FY10, negative net worth companies increased to 95 by FY17.<\/p>\n

    \u2981 The \u00a0debt levels for oil companies, telecom, power and construction companies have significantly increased in the past two years.<\/p>\n

    6. Steps taken to reduce the indebtedness problem:<\/strong><\/p>\n