MALLAYA INDEBTED RS 8000 CRORES -- GOVERNMENT OWES IT

"You have already declared me a criminal." Howsoever big the man is these words express a sense of despondency. Mr. Mallaya is not alone and many defaulters in banks express such feelings when their names go public. He has committed many defaults and that is what happens when money in any hand is held without a sense of accountability.

Money without accountability for ever is not possible, howsoever small or big the money is but the feeling of absence of immediate accountability is the origin of many a misuse be it out of greed, sympathy, extravagance, false sense of position/power or even genuine poverty. In any case money that is not yours more so of the public/government when usurped is a criminal offence.

As it happens in society in the case of other crimes like traffic offence, violence or even murder the weak, meek, poor and the common man is subjected to the strict rigors of the rules interpreted and implemented with stricter norms. Loans to individuals are direct, visible, specific and also structured. Default therefore is more open and the fear of collective deliberate default by group of motivated persons is at the back of the mind of lenders more so when recovery is due and reasons of nonpayment cannot be uniform.

The total amount of such loans is miniscule compared to a single defaulted amount by an entrepreneur. But such loans are normally to a company for a long term business model where the competency, dexterity and experience of running an industry largely being immeasurable factors loans are invariably given with high risk against high promises where the success is forgotten and failure catapulted to public debate. What is conveniently forgotten is, for every failed entrepreneur there are many successful ventures which has immensely benefited the growth of economy as well as employment and also the same entrepreneur succeeds in many and fail in some getting publicity for the latter.

This in no way is to justify loan defaults as failure of industry run with public money is as serious as failure of a pilot with passengers on board. The failure of industry happens slow as they emit enough signals like a slowly rotting apple. Default of payment to venders, staff, and taxes is the beginning. May be first time entrepreneurs are subjected to more rigors, but the seasoned escapes scrutiny beginning with their image, followed by a sense of hesitation to question and the easiest escapist term of 'collective responsibility' both at the level of sanction and receipt of loan. The defaulting borrowers in any loan use a standard phrase "I don't cheat, I am not a fraud, but I cannot pay now."  When they buy a high end car or go on a holiday abroad with family but say I do not have Rs.10000/- to repay you they cannot be seen differently than fraud and cheat.

Yet when such terms are used they are more severely offended as they feel a hit on their image which they consider as vital as the money they owe to others. When the borrower feels his image has taken a hit by the manner of asking for recovery he tends to be hostile more so when he feels singled out. 

Small loans are for survival and growth of individuals, but big loans are for the growth and survival of the society. Hence higher the loan, higher the collective borrowers responsibility be it a trust, company or industry. Issues involved both in sanction and utilization of money are finance, economics, competence, integrity and social responsibility. There is risk in the process but there are enough of government machinery to oversee, guide, check and if required even control the manner of running the enterprise. With similar risks there are enterprises that have succeeded perhaps also because government kept off it.  Hence when large borrowers succeed governments have to keep off it but when they don't succeed they have to act more than the entrepreneurs as the social responsibility of providing jobs and growth of the nation that too thro public money by private persons is very much theirs.

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