Taking the credit

Citation

(2009), "Taking the credit", International Journal of Productivity and Performance Management, Vol. 58 No. 3. https://doi.org/10.1108/ijppm.2009.07958cab.006

Taking the credit

Article Type: News From: International Journal of Productivity and Performance Management, Volume 58, Issue 3

India has not generated wealth to the extent that developed countries have, and therefore the country continues to remain a capital-scarce country with relatively high borrowing costs. As a consequence, manufacturing companies in India search for low cost borrowing opportunities, and they seek to build that into their competitive strategy framework.

The integration of the Indian economy with the global economy created opportunities for Indian companies to access low cost capital from global financial markets. Now this “easy” credit has gone.

Those companies which have borrowed abroad will begin to face severe problems as currency losses show up in their balance sheets. The external commercial borrowing window is tightly shut for manufacturing companies, and this has increased demand for credit from domestic sources. Companies and trade associations are therefore spending more time in lobbying with the State for increasing liquidity and reducing borrowing costs.