The ongoing recession has affected almost all sectors. Companies facing a crisis in business due to the recession will survive if there is a boom in the economy as the concerns created by COVID-19 eases. But there is a group of corporates that will not be able to survive the recession. These corporates, who have seen the aftermath of the collapse, have been brought to that level by a number of factors other than the recession that is affecting the economy as a whole. For the first time in the history of independent India, more than two dozen corporate groups were seen collapsing almost simultaneously, with no hope for a revival. These companies have been crippled as they lack no share in the crony business ventures under the Modi regime.
Kingfisher, Anil Dhirubhai Ambani Group, Videocon, Jayaprakash Associates, Bhushan Steel, Jet Airways, IL & FS, Coffee Day, Sahara, Unitech, GMR, GVK, IVRCL, Unitech, Geeta, Geeta Corporate groups such as Syntex, Crompton Greaves, Sea Group, Yes Bank, Fortis Healthcare, HDIL and DHFL have been hit hard by the economic downturn over the past few years. With the fall of these groups, the image of corporate giants like Anil Ambani, Vijay Mallya, Subhash Chandra, Rana Singh, Singh brothers, Naresh Goyal and Subrato Roy has fallen. Many brands that are very familiar to Indians have disappeared as a result of this. For many of these companies, a revival is not even conceivable.
Each of these companies has its own reasons that lead to the collapse, but there are some common problems. The unique political situation is an essential reason for this. The change in the political climate has made conspiracies impossible for many companies. Strictly speaking, this change came after the Modi government came to power. Businesses suffered a severe setback when a group of companies, which had previously obtained policies, procedures, licenses and public sector bank loans through special relations with previous governments and its allies, fell out of favour with the new regime. Companies that had close ties to the Modi government continued to receive special benefits. In short, many other companies do not receive the same benefits and benefits as Ambani and Adani, the beneficiaries of crony capitalism under the Modi regime.
In the case of coalition governments, the corporates’ friendship with any of their allies was sufficient to carry out their lobbying successfully. It was easy for these companies to maintain their dominance as they were always in alliance with political leaders under the table and backdoor deals. But with the stable government in power since 2014, old political ties have not helped such companies. Corporates that have failed to forge new political ties face a completely different situation.
At the same time, we have seen even the most pro-government corporate groups collapse most dramatically. The Anil Dhirubhai Ambani Group is a prime example. The biggest corruption allegation against the Modi government is the Raphael plane deal. One of the main allegations in the deal is that Anil Ambani’s company, which has no previous experience in aircraft manufacturing, was awarded the contract. At the same time, none of the agreements that led to the government’s impeachment were enough to save the Anil Dhirubhai Ambani Group from collapse. Friendship with the government alone was not enough to resolve the crisis that led to the flagship company Reliance Communications going bankrupt. The deal was not even a last ray of hope for those who were doomed to sink in a whirlpool.
