Applicability of the IBC to public sector enterprises: The case of Hindustan Antibiotics Ltd

In this article, Sudipto Banerjee, Karthik Suresh and I, revisit the HAL dispute and examine the position of PSEs within the ambit of the IBC. We argue that creditors of PSEs (or PSEs themselves) should be able to access the IBC. Removing PSEs from the IBC's purview may lead to delays in resolution, and may close an important route which the government could use for disinvestment.

(The article first appeared on the Leap Blog, 18 February 2020)

Isolation : A weak link in Indian public health

In this article, I argue that all four legs of the public health response -- trace, test, isolate, treat -- are weak in India. There is considerable interest in the problems of tracing and testing. There is a need for fresh thinking on the problem of isolation also. Once millions of people in India have been tested, what are we going to do with the persons who have tested positive?

(The article was first published on the Leap Blog, 29 March 2020)

Holding their breath: Indian firms in an interruption of revenue

In this article,  Anjali Sharma and I ask, How many days of liquidity cover is there, in the large non-financial firms, to be able to meet a certain threshold of minimum expenses in the absence of any revenue? 

We make four assumptions

1. A 100% sales shock for all non-financial firms. 
2. Liquid assets only include cash and marketable securities.  
3. A 50% realisation of the value of marketable securities in the book.
4. Basic core expenses required to stay alive

Our calculation is admittedly based on extreme assumptions: Zero decline in wage expenditure, zero access to fresh credit, and zero revenues for a certain number of days. More than half of the Indian corporate non-financial balance sheet is unable to hold its breath for 90 days, under these assumptions. About a quarter of the firms will not be able to handle a 30 day interruption of revenues. This highlights the incompatibility of a zero decline in wage expenditure with a sustained period of zero revenue and no fresh borrowing.

(The article was first published on the Leap Blog, 3 April, 2020)