Information before scams may help.

According to a report from Credit Suisse there are 10 companies in India with the highest amount of debt. Their combined debt add up to 27% of corporate loans and 12% of all bank lending. Adani group has debt of Rs 960 billion, Essar Rs 1.01 trillion, GMR Rs 480 billion, GVK Rs 340 billion, Jaypee Rs 752 billion, JSW Rs 582 billion, Lanco Rs 471 billion, Reliance Rs 1.25 trillion, Vedanta Rs 1.03 trillion, and Videocon of Rs 454 billion. Most indebted companies are into minerals, which have been hurt by the crash in commodity prices, real estate, because of the clampdown on black money by the present government, or infrastructure businesses, which have suffered because of delays in land acquisition. More than half the debt of 6 of the 10 companies is highly stressed and their ability to pay interest on their loans, called interest cover, has fallen. GVK has an interest cover of 0, GMR of 0.15 and Lanco of 0.2. Less than 1.5 is taken as weak cover. Jaypee group has defaulted on 65% of its debt, Essar on 36%, GMR on 37% and Lanco on 38% of its debt. These are terrible figures and one would expect that banks would be foreclosing on their loans and taking over the assets of the companies. Not so. Loan approvals to indebted companies have risen by 85% since 2011-12. Partly it is because bank officials are afraid to declare bad debts on their books so they issue new loans to offset the previous ones, called evergreening, and partly because of enormous corruption in our banks. A scam amounting to Rs 60 billion in money laundering, called hawala transfer in India, has been unearthed at the Noida branch of the Bank of Baroda. A loan for bribes was discovered last year at Syndicate Bank. There are brokers who are earning millions of rupees by arranging loans for dodgy business fellows, who have no intention of repaying, by distributing expensive presents or bribes. Most of our companies do not disclose all the information required under our rules. How are investors to make informed decisions on whether to buy shares in these companies? No wonder Indians have a deep distrust of the stock market. But not just private companies. Our government is also slothful in collecting and releasing information about the economy. Figures released are corrected later. How is the Reserve Bank to decide on monetary policy and companies on investing if they have no idea on the direction of the economy. Toll charges are high, causing resentment among users, because traffic projections were wrong. It is because of a lack of proper accounting that we have the yearly circus of the budget where taxes are regularly increased to cover unforeseen deficits. Ignorance is blindness. Digital information before digital economy.