Title: Miles to go
(The new bankruptcy code yields its first success, but many wrinkles remain)
Context:- Good news has finally started to roll out of the refurbished bankruptcy courts. Tata Steel acquired 73% stake in the bankrupt firm Bhushan Steel for about ₹35,000 crore last week, making it the first major resolution of a bankruptcy case under the new Insolvency and Bankruptcy Code (IBC).
Bhushan Steel was one among the 12 major accounts referred to the National Company Law Tribunal at the behest of the Reserve Bank of India last year to ease the burden of bad loans on banks. The proceeds from the acquisition will go towards settling almost two-thirds of the total outstanding liabilities of over ₹56,000 crore that Bhushan Steel owes banks.
While it may be unwise to read too much into a single case, the Bhushan Steel resolution is nevertheless an encouraging sign for banks because they typically manage to recover only about 25% of their money from defaulters. In fact, between April 2014 and September 2017, the bad loan recovery rate of public sector banks was as low as 11%, with non-performing assets worth ₹2.41 lakh crore written off from their books.
If the banks do indeed recover funds of this scale, it would considerably reduce the burden on taxpayers, who would otherwise have to foot the bill for any recapitalisation of banks. Even more important, speedy resolution would free valuable assets to be used for wealth-creation.
Challenges still plaguing the bankruptcy resolution process. The IBC, as the government itself has admitted, remains a work in progress.
Issues such as the proposed eligibility criteria for bidders have left it bogged down(उलझना) and suppressed its capacity to help out creditors efficiently. Also, the strict time limit for the resolution process as mandated by the IBC is an area that has drawn much attention, and it merits further review in order to balance the twin objectives of speedy resolution and maximising recovery for the lenders.
Final Words:
Going forward, amendments to the bankruptcy code should primarily be driven by the goal of maximising the sale price of stressed assets. This requires a robust market for stressed assets that is free from all kinds of entry barriers.
Title: The classroom as the instructor’s castle
(The autonomy of the teacher has been cramped, and it reflects in the state of higher education)
Point: Some months ago, a global leader of the IT industry set sections of India’s corporate-sector elite aflutter(excitement) with the comment that Indians are not creative.
Steve Wozniak, a co-founder of Apple Computer, had predicted that Indians are unlikely to create world-leading IT companies because they lack the creativity to do so and argued that this has to do with the education system.
Mr. Wozniak’s assessment of India’s education system is sharp. He traced the lack of creativity to an education system that rewarded studiousness over independent thought.
He also managed an anthropological take when he identified the ‘MBA and the Merc’ as the mark of success in India’s corporate world.
Crisis in higher education
Actually, what India is experiencing in higher education today is far worse than merely the production of studious but creativity-challenged youth. There is abetment of a toxic productivity whereby our universities churn out youth with a poor grasp of the subject matter that they are expected to know and an even poorer understanding of the challenges that India today faces, for which they alone can provide the solutions.
This is particularly troubling as public expenditure on education in India favours higher education far more than elsewhere in the world when schooling is severely neglected by comparison.
Close to 50 years ago, Nobel laureate Amartya Sen had spoken of a ‘crisis in Indian education’ pointing to how India’s educational policy had been shaped by the aspiration of its middle class.
Creativity is unlikely to have been a part of it. However, it is precisely to ensure that there is no sectional capture of public institutions intended to serve a larger purpose that we have public regulators.
While there is more than one regulator for the higher education sector in India, for sheer reach the University Grants Commission (UGC) is unmatched.
Journal publication
The bone of contention is the basis on which the regulator identifies ‘recognised’ journals, publication in which alone earns credit for faculty. Having drawn up such a list a couple of years ago, the Commission appears to have now backtracked.
Possibly stung by the claim that an astonishingly high percentage of the journals on its original list are of dubious distinction — the term for which is ‘predatory’(exploitive) in that they either solicit articles to be published for a fee or follow no clear refereeing procedure — the UGC has suddenly trimmed the list. This has led to questions of the criterion that has been used.
Final Words
Finally, once courses are evaluated by students, the classroom should revert to being the instructor’s castle. A pincer movement of corporate interest and political pressure combined with regulatory overdrive have cramped the autonomy of the teacher. The state of higher education in India today partly reflects this.
Vocabulary words:
Refurbish (verb) = Renovate and redecorate (नवीनीकरण)
Behest (noun) = A person’s orders or command (आदेश)
Write off (phrasal verb) = A cancellation from an account of a bad debt (ख़ारिज करना)
Deflect (verb) = Cause something to change direction (मोड़ना)
Plague (verb) = Cause continual trouble or distress to
Plethora (noun) = A large or excessive amount of something (बहुतायत)
Streamline (verb) = Make system more efficient and effective by employing simpler working methods
Bog down (phrasal verb) = To be so involved in something difficult or complicated (उलझना)
Autonomy (noun) = A self-governing body, independence (स्वयं शासन)
Cramped (adj) = Uncomfortably small or restricted
Anthropological (adj) = Relating to study of humankind (मानव-विज्ञान संबंधी)
Swampy (adj) = Marshy, boggy (दलदली)
Studious (adj) = Spending a lot of time in studying or reading (अध्ययनशील)
Abetment (noun) = Incite, provocation (उकसाव)
Laureate (noun) = A person who is honoured with an award for outstanding creative achievement
Sheer (adj) = Complete, absolute (वास्तविक)
Garner (verb) = Gather or collect
Predatory (adj) = Exploitive
Aggravate (verb) = Make a problem worse or more serious (बिगाड़ना)
Vandalise (verb) = Deliberately destroy
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