Two classes of creditors
This has reference to ‘A raw deal for operational creditors in IBC’ (August 10). The operational creditors, by design, get only secondary treatment. They do not have place or voting rights in the Committee of Creditors (CoC) and have least priority in the waterfall mechanism in distribution of realisations.
If the company goes for revival and if the services of the operational creditor are essential for the going concern, the CoC may share some money. But this is not the case if the company goes for liquidation. Operational creditors play a significant role in running of a company and their support strengthens its working and improves recovery chances of financial creditors also.
There is no logic in treating them as subservient to financial creditors and fixing the distribution with reference to the realisable value on liquidation. An amendment is required in the law to eliminate the differentiation between the two classes of creditors so as to give a fair share of cash flow to operational creditors.
M Raghuraman
Mumbai
Boosting agri exports
In an increasing hungry world, there is a splendid opportunity for India to step in and become an important player in agriculture exports. For far too long, agriculture has played poor cousin to the service and manufacturing sector and it is time it takes its rightful place in the GDP of the nation.
The government has undertaken many initiatives to boost agri exports. However, the main drawback is the general unwillingness of the farmers to change over from traditional crops and adopt more scientific and modern techniques of production.
The idea and image of a poor farmer struggling to make both ends meet must undergo a radical change if India is going to be major force in world agricultural exports.
Anthony Henriques
Mumbai
No room for complacency
This refers to ‘IMF paints a gloomy growth picture’ (August 10). The silver lining in the gloomy forecast about the world economy is that India would become the fastest growing economy with a growth rate of 6.1 per cent, much ahead of the US and China.
However, this should not make us ignore the looming dangers of high unemployment among the educated youth and inflation. The CMIE puts the unemployment rate around 8 per cent. Also, the number of job seekers as measured by labour force participation rate has dropped from 46 per cent in 2020 to 40 per cent in 2022, according to World Bank data. Of the many reasons for this apathy for job hunting, one is the lack of faith in the government to provide employment.
YG Chouksey
Pune
Subsidy management
This refers to ‘Sowing a crisis’ (August 10). Our country is known for governments at all levels vying to play politics in the distribution of public resources, especially revenues raised through taxes. While governments in developed countries camouflage subsidies and ‘expenses on marketing’ (which in some cases we call bribe) under different heads, we consider subsidy as a bad word, which has resulted in poor management of production, marketing and prices.
Policymakers are yet to reconcile to the need for better management of domestic gold stock, land and agricultural production and marketing. The only silver lining is a well developed public sector, which, if skilfully managed and gainfully modernised, can meet several challenges facing crucial sectors like space research, defence and banking.
MG Warrier
Mumbai
Curb fertiliser subsidies
At a time when the Centre is aiming to do away with the subsidy component, its plan of increasing the fertiliser subsidy outlay by 115 per cent is disturbing. The suggestion of initiating inflation-linked price hikes on all fertiliser products to narrow the gap between production cost and sales price is worth following. In parallel, the Centre must extend fertiliser subsidy directly to the farmers.
However, it is time that agricultural experts advised the Centre to frame time-bound strategies for the gradual migration of farmers to organic manure.
RV Baskaran
Chennai