Adanigate Unravels; Tamilisai Tightrope; Science Budget

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Opinion Watch

Adanigate Unravels

Not too long ago, a tweet by a senior Mumbai-based journalist had sent the shares of Adani Group of companies on fast lane downward. But within weeks, they scaled their peaks to touch the moon. Why in the world any investor with basic understanding of equity investment would put money in a share which commands a PE of 600, if not committing financial suicide? The PE ratio is a touchstone for equity investing, and a scrip with it being at 100 is said to be overvalued.

The Pioneer in an Editorial has sought to shed light on multi-dimensional aspects of the Adanigate. From 2016-17 to 2020-21, the government has poured Rs 310,997 crores in recapitalization of the ‘sarkari’ banks, who burnt their capital in funding frauds previously. The daily warned that the freefall of Adani stocks will have ramifications for banks and public exchequer. The Noida-based daily underlined that the government’s silence is not helping the cause. Stating that it’s time for action, the daily wondered what the regulators such as SEBI were doing to the issue of overvaluation.

Adani Group is stated to be in talks with banks to pre-pay loans backed against shares. But this may be the beginning of a new stress journey, for the full share strength of Ambuja Cement and ACC were pledged after their acquisition by the Adani Group. This is the business model of the group – leveraging the share base to buyout and expand, which has been done at a speed unseen and unheard in the Indian corporate history. The group has acquired several critical assets, including airports, in recent years, and there could be foul spillover in such assets. But there should be no shred of doubt that Indian stock market hasn’t gained freedom from manipulators.

Tamilsai Tightrope

Governors in the Opposition-ruled states in the last few years have sought to turn Raj Bhavans into parallel power centres. Tamil Nadu, Kerala, Telangana and West Bengal have seen the tussle of the Raj Bhavans and their respective Chief Ministers’ secretariats.

The New Indian Express in an Editorial has stated that Constitution is being undermined in such tussle as the tug of war between Telangana Governor Tamilisai Soundararajan and CM K Chandrashekhar Rao (KCR) reached the High Court. The KCR government’s accusations have been that the Governor doesn’t approve bills, including financial bill. Soundararajan’s lament is that the KCR government doesn’t respect protocols. The daily has stated that two warring sides have come to peace on the advice of the High Court to amicably settle differences. Now, she will address the state Assembly. The daily stated that the matter shouldn’t have reached the judiciary in the first place.

The RN Ravi episode in the Tamil Nadu Assembly recently revealed ugly side of the spate. One may wonder why Governors in Congress-ruled states are not as adventurous as their counterparts in region outfits headed regions.

Science Budget

The Hindu in an Editorial has stated that developed and scientific countries spend two per cent of their budgets on research and development (R&D), India lags with just 0.7 per cent. The Budget hasn’t helped the cause, as allocation still stays at one per cent of the GDP. Yet, the daily underlined that there are attempts to prioritise a few areas such as Deep Ocean Mission and Department of Science and technology.

Last year, India had most patents filed worldwide. Also, highest foreign direct investments in R&D came to India last year. But the government is miser to raise the bar. Transition to a knowledge-based economy has status quo hurdle.

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