Policy of the year

There could not have been a better new year gift for banks and financial institutions, who are stuck with Rs 100,000 crore (Rs 1,000 billion) bad loans.

Banks and FIs are now busy listing corporates to whom notices have to be despatched. Indian companies hitherto got away with murder.

While promoters flourished, their companies languished in the Board for Industrial and Financial Reconstruction.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Bill enables lenders, including banks and FIs, to take possession of the defaulting companies' assets and management if they fail to honour their repayments.

Banks and institutions have posted over 20,000 notices to companies in an attempt to recover at least a part of their dues.

While a few companies have realised the futility of trying to evade lenders by opting for a one-time settlement, several others are seeking refuge in archaic statutes like the Bombay Relief Undertaking Law.

Innovative ways of intimidating defaulters are being devised by some lenders like the Vijaya Bank, which plans to hold dharnas outside the office premises of rogue borrowers.

All this, even as industry chambers have raised a hue and cry over the need to distinguish between wilful and unwilful defaulters.

Corporates are feeling the heat. If banks and FIs keep the pressure on, rogue companies will be left with no choice but to settle their dues. This will only help them by further bringing down the cost of credit.

Achievement of the year

The dismantling of the administered price mechanism in the oil sector has largely been smooth thanks to the Centre's tinkering with duty rates.

While crude prices shot up from an average of $23 a barrel in 2001 to $31 now, prices of petrol and diesel have not quite hit the roof.

Except on the pricing and subsidy front, the petroleum sector has been completely deregulated. An affair well managed.

Debacle of the year

The report of the joint parliamentary committee on the stock market scam turned out to be the anti-climax of the year.

After the Securities and Exchange Board of India's first investigation report, which insinuated several big companies' involvement in price rigging, one expected the JPC to be damning in its report.

Sadly, the JPC blamed the regulators in general, but expressed its inability to book any corporate due to lack of conclusive evidence.

Debate of the year

Vijay Kelkar became a household name in 2002, though only in the last quarter of this year.

His reports were critically dissected by the bourgeois and political parties, including the Bharatiya Janata Party, because its recommendation hit the middle-class, the BJP's vote bank.

The elimination of tax sops on small savings, home loans, etc may make good economics, but not politics. The verdict will be out on February 28.

2002: The Year That Was

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