Corporate debt write-offs: privatising profits, socialising losses

Corporate loan write-offs are justified as necessary to improve banks’ financial situation and to stimulate economic activity. However, they increase the fiscal deficit and government debt, reducing the money available for social welfare and development programmes. The burden is borne by taxpayers and we now also have to make do with fewer public services. Large loan waivers also distort the market by handing corporate houses an unfair advantage – they not only access cheap credit, but avoid accountability. Smaller businesses, meanwhile, get no such relaxations and have to pay higher interest rates to make up for the loss caused by the write-offs. It’s a process that reeks of corruption and has no moral root. Please listen to the latest episode of All Indians Matter. Learn more about your ad choices. Visit megaphone.fm/adchoices