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India Stands To Lose Almost ₹50,000 Crore, Thanks To These Folks

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By Bharat Kumar Meher:

Some problems of the economy are not easy to understand or analyse in an appropriate and consolidated form. Normally, if we discuss two or more issue together, it may seem irrelevant or not directly related, but if we examine these in an integrated manner, the cloudy picture may convert to a new one and a fresh correlation between two entirely different issues can be drawn. Non-Performing Assets (NPA) and Limited Liability Concept are two such issues in which a close correlation can be identified especially when we examine them in the context of the recent Vijay Mallya episode.

Today, Vijay Mallya, the Ex-Chairperson of Kingfisher Airlines and the biggest willful defaulter with a debt of about Rs.9000 crores, has already left India and settled in another country. The court has already issued a non-bailable warrant against Mallya for diverting 430 crores. But the question is why the law can’t take immediate steps for such an obvious out-in-the-open nonpayer. A warrant was issued a few months back when it was proved that the loan taken by Mallya had been used for purchasing personal property in foreign countries. But could such legal steps not have been taken before? The answer is clear: Kingfisher Airlines was the debtor not Vijay Mallya and a company is a separate entity from its shareholders. All transactions were made through the company. Therefore, it was the company that was liable to pay or suffer the consequences, but neither the shareholders nor the directors or chairperson are liable for it personally. The company has already been declared bankrupt and its assets have been seized but such assets aren’t enough to compensate the banks. A critical question can be raised here – if a company becomes insolvent why are the shareholders, managers, directors or chairperson not liable? The answer to this question is hidden in the concept of limited liability. Before venturing to answer the above question let me offer a brief understanding of the NPA problem facing Indian banks.

For the clear understanding of the layman, Non-Performing Assets refer to loans or advances for which the principal amount (or a part of it) or the amount of interest (or part of it) remains overdue for a period of 90 days or more. Many banking experts are now calling it the big disease that is severely affecting the functioning of banks. Most people don’t know that the losses in the form of NPAs are not only the losses of the banks but also of the citizens of a country and the whole nation, as a major portion of the money lent by the banks, comes from the deposits received from the public and government share. Ultimately the NPAs in public sector banks are compensated by the Government as a result of which the fiscal deficit increases. One of the hidden reason due to which such NPAs are increasing day by day is flaws in certain laws. The major flaw in the present law is that the court of law cannot enforce the director(s) or chairperson to attach their private asset, in case of bankruptcy of a company and as a result, the total debt taken by the company is irrecoverable, and loss will pile up on public finances.

It is known that wilful defaulters are one of the biggest reason behind the increase of such NPAs. Even though the RBI has prescribed certain norms to recognize wilful defaulters in India, but still no strict legal actions could be taken to make recoveries from these wilful defaulters just because of the limited liability. Most of the wilful defaulters are either companies or big business houses or firms. A company which is an association of many persons enjoys many privileges like separate entity concept, perpetual existence, and the division of risk among numerous shareholders and limited liability. Such privileges attract more people to invest their funds in joint stock companies, and as a result, the companies fetch more capital from the public.

The prime advantage of opening a joint stock company, or to convert any firm into a joint stock company, is to enjoy the benefits of limited liability. Such companies were allowed to start by the government to promote industrialization and to create more employment opportunities. Moreover, the concept of limited liability was further encouraged with the development of Limited Liability Partnership (LLP) in the year 2008, which deems the owners of a concern liable only up to a fixed sum, or up to the investment made by the owners, or up to the nominal value of shares held by them whatever may be the amount of total liabilities. In other words, if the outside liabilities increase due to any loss suffered by the concern then the owners are not liable to attach their personal or private assets to pay the debt. A company with a large share capital could raise more debt from banks as in the case of Kingfisher Airlines.

When a part of the Kingfisher Airlines collapses, Mallya was accused of being a “willful defaulter.” He had taken loans from a group of banks in the name of his company and misappropriated the cash. As a result, when Kingfisher became bankrupt, no proper legal actions could be taken immediately because it is the bankruptcy of Kingfisher not the insolvency of the Chairperson, Vijay Mallya.

Most people think that the losses of the banks in the form of Non-Performing Assets (NPAs) are the losses of the banks only. But the people must be aware of the fact that more than 70% of the losses of the banks are written off through the finances provided by the Government of India and these finances are the funds collected in the form of tax from the people. Thus, the finances provided by the Government leads to the fiscal deficit of our nation. Not just Mallya but an amount Rs. 50,000 crore currently stands locked up in the form of NPAs because of the wilful defaulters of India. Companies are clearly taking advantage of this loophole in the law. They are misusing the concept of limited liability and taking loans in the name of the company for personal use. Other defaulting companies like Winsome Diamond & Jewellery Co. Ltd., Electrotherm India Limited, etc. are afloat in the same boat as Kingfisher Airlines.

To safeguard the country against this, few reforms have been made by Security Exchange Board of India (SEBI). Now the director or directors of a company must repay loans within the stipulated time period to continue in the position they hold. However, still many revisions in loan recovery process are required to make a strong credit system in the banking sector. According to Kishore Sansi, the Managing Director of Vijaya Bank and chief operating officer, “Our legal system is old and somewhat complicated. I opine that legal reforms are urgently needed to control the wilful defaulters. The debt recovery tribunals are doing a fine job, but they are handicapped by a number of constraints,” Moreover it is a fact that day by day the number of joint stock companies and limited liability partnership firms are increasing, and it is evident that their demand of loans would also increase. So, can it be possible for the banking sector to provide sufficient finance to the needy or priority sectors without giving prime emphasis to the big business houses? A painful truth that all the people of India must know is that the financial support given by banks to these big defaulting units are irrecoverable now.

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An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

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Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

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A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

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A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

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A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

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A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform Change.org, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on Change.org has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in Change.org’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

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