0
0
Indicating that some stakeholders’ actions were scuttling the intended outcomes of the Insolvency and Bankruptcy Code (IBC), Chief Economic Adviser Krishnamurthy Subramanian invoked the concept of ‘Dharma’ on Friday to urge Indian industry to prevent being ‘practical’ and strive to be ‘ideal’, instead.
The IBC regime, he said, had helped India emerge from a ‘feudalistic system’ where a company debtor felt it had been his ‘divine right’ to retain control, and shifted the main target to a ‘Creditor in Control’ regime.
Citing India’s ancient literature, including the Bhagavad Gita, Mr. Subramanian said problems arise when there’s a wedge between socially optimal behaviour and conduct that’s individually optimal for an economic agent.
“I think, within the case of IBC, you’ll clearly see that there are some actions that each stakeholder can take, which might be optimal for the whole IBC system as a whole; visibly what every entity is doing that’s basically privately optimal for them. And this wedge is what’s actually resulting in the preservation of this Nash equilibrium , where we are stuck where we are,” he said.
“When you think that about the concept of Dharma from an economic angle, you begin realising why it had been such a strong idea… (it means) there’s a way bigger goal… And in some sense, if you think that from an economist’s perspective, Dharma is really this idea of aspiring for what’s socially optimal,” he said at a CII meet on five years of the IBC, urging industry captains to think beyond the “I, Me and Myself” perspective.
Stating that some listeners may consider him as a ‘young guy just talking impractical stuff’, the CEA said that he ‘thoroughly disliked’ the word ‘practical’ because it often becomes an alibi for compromises.
“In contrast, the word that basically inspires me tons is ‘ideal’. So why don’t we actually believe disbanding that word ‘practical’, and instead actually stick on to the word ‘ideal’. and that i think just that straightforward thing you’ll do, can do us a world of excellent ,” he asserted, adding that detailed suggestions to repair the IBC might not suffice ‘unless this macro perspective of Dharma’ is taken under consideration and acted upon.
“I am absolutely sure that progress will happen going forward. and therefore the next time we’re actually talking, maybe at the 10th anniversary of IBC, we’ll all be congratulating ourselves at the wonderful progress that we’ve made within the next five years,” he concluded.
Average Rating