The Week That Was:

From: Vartaa Editorial Team on May 15, 2016

Rain Rain come again

It's that time of the year to chant the 'Raag Malhar' or the 'ghanana ghanana ghan' song n dance. While most parts of India are still suffering draught conditions, all eyes turn to the Indian Meteriological Department (IMD). Although rain swept Sri Lanka last week, IMD predicts monsoon may hit Kerala by 7 June, about a week late. In a country where rains still dictates the economy, the ministry of earth sciences has undertaken a 2 month long project to understand the process of monsoon better which will help in better predictions.

New Bankruptcy Law

In the backdrop of the Mallya saga and piling corporate debt, the Rajya Sabha passed the Insolvency and Bankruptcy Code Bill last week. While Union Minister Jayant Sinha noted it will fast track recovery of dues if a company goes bankrupt, globally it has been hailed as a much needed bill to increase ease of doing business. The financial times does a breakdown of why this bill is important and what it accomplishes here.

The difficulty of cricket governance

As cricket governance tries to pick itself up from the corruption scandals post N. Srinivasan era, Shashank Manohar, a Nagpur based lawyer (known for his impeccable track record and integrity) has been unopposed and unanimously elected as the first independent chairman of the International Cricket Council (ICC). Mr Manohar recently quit as the BCCI president. Where Mint sees light, there has been some skepticism as well. Meanwhile Anil Kumble's term was extended as chairman alongwith the addition of Rahul Dravid.

Opinions you must read:

Chart of the Week

With the recent focus on bad debts of commercial and state banks, we thought it was a good time to look at the outstanding liabilities of different Indian States. Largely, the trend seems to be that the overall outstanding debt of Indian states is reducing. However, a few key states that stand out are Tamil Nadu, Jammu and Kashmir and Nagaland. Bihar and Mizoram are probably two which have shown the largest improvement over the years. Bihar's staggering GSDP growth in the past few years has probably helped it lower it's debt percentage.

Many large states like Maharashtra, Karnataka and Tamil Nadu are accumulating debt at a fast rate - which is represented by a flat or upwards trending tail on the chart, given the fast growth those states have seen in the past years.

Please note that this chart shows a percentage of the state GSDP. In case of Maharashtra which has the highest GSDP of Rs. 1,476 thousand crore, the 2014 outstanding liabilities were Rs. 265 thousand crores which is larger than the GDP of 15 Indian states in that year and also larger than the GDP of the seven North Eastern states put together in that year.