The Punjab and Maharashtra Cooperative Bank (PMC) fiasco is an indicator of the impending economic catastrophe. PMC is on verge of bankruptcy due to it lending 2,500 crore to real estate company HDIL, which went bancrupt pulling the bank down with it.
After grabbing the bigger chunk from RBI, government has now directed the PSUs to loosen their pockets, and shelve out money for Capital Expenditure (Capex). What, does this mean? It is a jargon that amounts to ordering the few profit making PSUs to give money to corporates. When this amount would be invested into capex, it would translate to the corporates getting more work and ultimately getting sop indirectly from the government. Continue reading