This refers to the article “Corporate sickness defies cure” ( Business Line , November 28). Right from the recession era in the late last decade, the risk of business units going sick is on the rise across the world; most of them were even closed down, as the rescuing entities believed that reviving such units would prove to be futile.
There are many reasons for the companies turning sick, the most important being mismanagement (internal), cost and time of mobilising funds, and not availing of the government/institutional interventions when businesses need them (external). Except mismanagement, other factors are external. Even these can well be managed by a company, provided there is an ‘able-cum-dynamic' management in place.
Sugar pricing
“Such bitterness over sugar pricing” ( Business Line , November 29) shows that after onion crisis, we are heading for serious supply constraints on the sugar front. An expert committee headed by C. Rangrajan submitted its report in October 2012 on the regulation of the sugar sector in India. The main recommendations of the committee were rationalisation of cane pricing and liberalisation of sugar trade, to be introduced in a phased manner.
However, levy sugar obligation and administrative control on non-levy sugar need to be dispensed with immediately.
Over 50 million sugarcane farmers and over five lakh workers are employed by the sugar industry and unless these serious issues are sorted out, India will face serious sugar shortage and, ultimately, the consumers will suffer.
M. M. Gurbaxani
Bangalore
Banking licences
“Taking fun out of banking" ( Business Line , November 29) has called a spade a spade regarding the entry of new players into banking. The RBI’s binding and stringent guidelines/regulations will not only curtail the operational freedom of the new/prospective entrants, but also make it too onerous for them to even break even after a couple of years. In this backdrop, Tata Sons has been realistic in withdrawing the application and it may even act a dampener for the other NBFC applicants.
As the country needs more banks, entrants with substantial resources are required.
To invigorate the existing players and challenge them with innovative products, the advent of new players is all the more needed. The RBI’s task is cut out to make it a win-win situation.
C. G. Kuriakose
Kothamangalam, Kerala