Drownnded in debt

It is not only Governments whi confronted with a debt trap but also the constituents of corporate sector. If inef ficient Governments can run into heavy external and internal debts, there can be no great objection to corporate entities throwing to the winds accounting ratios prescribed to ensure sound financial man agement.

If Governments can adopt practices that Mr. Micawber would have envied and still be in business as it were, the captains of industry can prosper on repeat issues of junk bonds or their equivalents. Cost audits of Maruti Udyog had revealed that the company made its profits by re investing the cash deposits received from the public in the bonds of other public sector undertakings. These bonds have likewise helped the larger private sector companies. There is no need for corporate managers to worry over viable manufacturing in a situation where lucrative investments give their companies substantial profits. The shareholders have nothing to complain about as long as they get good dividends. It does not matter to them where they get the dough from and how, as long as they get it.

With Government relying increasingly on market borrowing the nation is being drowned by junk bonds -- in the shape of loans being floated year after year with the loans of each year helping to service loans of past years. "Drownded" as the waiter in Dickens' Nicholas Nickleby would have said, may be not inappropriately considering that posterity will have to pay for the extravagance of our generation.