Thursday, 18 October 2018

US – China Trade War: What’s in it for India?

US – China Trade War: What’s in it for India?

One of the main Presidential Elections agenda for Donald Trump in 2016 was to bring back more jobs to America and for doing so he would introduce strict measures on countries with high trade deficits with the US, mainly hinting on China. And with almost two years of his term over, Donald Trump has taken it too aggressively in the calendar year 2018.

The year began with the US imposing tariffs on Solar Panels, Washing Machines and other small electronic goods which formed a major chunk of Chinese imports to the US. Further in March 2018, President Trump asked the United States Trade Representative to investigate and apply traffic on goods worth 50-60 Billion USD. As a retaliation China too imposed tariffs on US Imports to China, which mainly includes automotive parts, weapons and food products. As a result of this retaliation Trump announced another round of tariff on goods worth 60 Billion USD in May 2018 and also planned to keep a check on investments. With this announcement, a full blown trade war began between the two global giants with US announcing tariffs on goods worth 250 Billion USD (source) and China announcing the same on goods worth 110 Billion USD till September end.

The question that comes to mind is that ‘Is it fair enough from the end of the United States to go into a full-fledged trade war with China at a point where the global GDP growth rate is already slowing down. However when one realized the trade deficit between the two countries and their government bond holders, it becomes very clear if US needs to do so.

With a trade deficit of 380 Billion USD it is very clear that US needed to take measures.

The ongoing trade war is being seen as a full blown war by various analysts who predict that this may slow down the global GDP growth rate by around 0.5%. However the point here to be noted is that if it will be a curse for all or if it may be a blessing in disguise. For instance, with Apple getting a major hit due to the sanction of tariffs in for import from China is planning to shift its base to Vietnam, which may boost the economy of Vietnam. In near future, many manufacturing units from China may move to nearby countries with low cost production capacity which may boost their economy.

Now the main concern for us is ‘What is in it for India’. The main point here to be noted is that the trade war may not only restrict to these major giants but the ripples of it will be felt by most of the countries, including India as in its current form the global economy is still in a way bipolar in nature, though moving towards a multi-polar setup. The tariff imposition will increase out import cost resulting in increased prices, pushing the inflation which so far seemed to be manageable. The rupee value may further degrade on this account. Also in case that case, government may not achieve its fiscal deficit target. Further the sentiments of investors will decline globally resulting in lower investments with many already looking cautious, which is already evident with downward trend of the bull in recent past.

However, for being a more of an internal market demand based economy and just by being a silent spectator as on date, India can see a lot of potentials due to the void that this trade war has created. For instance, as a result of this war, China may reduce its crude import from US and may look for alternatives. As a result, crude oil prices may fall globally which is a good news for India as it might lower its burden on Imports. Thought oil bills might reduce, investor sentiments might get weaker too squaring off the benefits. With our Exim component standing at around 40% of our GDP, it is hard to predict regarding the case. Also due to the voids so created in US imports, Indian manufacturing sector may explore ways to fill the gaps so created.

One of the major advantage that India may see is the softening of the Chinese stand as it will be the bigger looser of the Trade War with US, being an export dependent economy. With most of its industries being hit, it may look towards its neighbor India and other south Asian countries for help. The situation may help India negotiate better. Also India may seek a resolution of OBOR and entry into Nuclear Supplier’s Group. With its relations with the smaller neighbors souring in recent past, this comes as an opportunity as the bear will be weaker than before.

There is no doubt that economic growth of all involved, directly or indirectly, will be hurt across the globe, but the intelligent will be the one who is hurt the least and still grabs the new opportunities, in economic or geopolitical scenario, better through the tricky waters.

Tuesday, 27 March 2018

JIO: Was the Risk as risky as being said?

Reliance JIO: Was the Risk as risky as being said? How is it Making profit so early? Will it continue the run?

It was 1 September 2016 when Mr Sunil Mittal had a handful of laugh for the last time, as Mr Mukesh Ambani, was gearing up for a big fat announcement. Anticipations were high, and so were the expectations from him, as whenever they (Reliance) did something, they did it too big and always in a way overturned the market. Even that day the markets of their potentials competitors shattered, went down by almost 6-8% on an average, wiping out approximately INR 500 Cr (figure arrived as per average drop in share value and total equity capital) from their equity value in just one day which was not seen earlier, even during 2008 crisis.

On its launch, Mr Ambani made an announcement of investing INR 85,000 Cr into this new telecom branch of Reliance Industries, backed by its deep pockets (2,20,000+ Cr deep) that it has from its Oil business. However as per multiple reports, the investment has already crossed INR 1,50,000 Cr. And still Mr Ambani is pouring in money into Jio and doing some shopping, Saavn was bought recently and merged with Jio Music. With such huge investment, with competitors like Airtel, Idea & Vodafone and without such high potential of revenue per user ( INR 120-150 per user) is was junked out by many as analysts as a suicidal investment.

However, in its 15th months of operation, Jio posted its first profit of INR 504 Cr. This shocked many as how is an investment of around 2 Lakh Crores make profit so early, in spite of starting its revenue collection only in 7-8th month of operation as for initial few months they gave away SIM and unlimited data and voice calls, all for free.

When seen preliminary in the beginning, it seems really tough to figure out the strategy. However when the links are studies and connected, all the dots seem to join and opens up the strategy being used and the best part is that, it could have been thought by others too. Simply put, the answer is Optical Fiber cables. Yes, this is their major part of strategy, combined with their ability to take bigger risk, backed by deeper pockets. Now lets see how this charts out their plan.

If one sees deeply, them one can notice that most of the investment done by Reliance Jio is towards laying optical cable fiber only. With initial investment alone it has almost covered all the major parts of the country. As Optical Fibers offer high speed (theoretically the speed of light) and very low maintenance, it explains why Reliance Jio invested big, only in 4G and not in 2G and 3G. Further, the Optical Fibers ensure minimum loss of data, thus there is minimum wastage of energy and maximum efficiency. As a result of this, it has the capacity to transmit heavy traffic at a cheaper cost and maximum efficiency, with a single time investment alone with low maintenance.

The most important question comes to mind is that with all that huge investment and optical fiber technology being used, will Jio be able to compete and make profit? As known, as on date Mr Ambani has invested almost INR 1,50,000 Cr and is still adding investment. With its current database of 15.2 Cr users, assuming a depreciation period of 15 years alone and a maintenance & operation cost of INR 3,300 Cr. per year (Low as optical fibers are low on maintenance and high on operational efficiency needing very less intermittent energy supply), it gives a cost of only INR 73.1 per user per month as the cost (inflation not considered to keep it simple). However when the same is seen for Airtel, with a user base of 29.2 Cr, whose operational cost was INR 38,583 Cr for year 2016-17 and a depreciation cost of INR 12,203 Cr as per the P&L statement, it come around INR 145.2 per month. Further when the same is analysed for Idea, with a user base of 19.76 Cr, whose operational cost was INR 25,183 Cr for year 2016-17 and a depreciation cost of INR 7,700 Cr as per the P&L statement, it come around INR 138.7 per month. So it is clear that the investment done by JIO is competitive and is definitely going to make profit.

Further if we see the trends in ARPU (Average revenue per user per month) as released by Cellular Operator Association of India for last 8 Quarters, it can be seen that it has been dropping continuously, almost dropping by 50%. This steady drop explains the fierce competition between various operators to offer services at lower charges, and in such competitions, only the one who can sustain long term and ensure profitability can go long. This clearly explains the recent trends of loss by operators in recent past and profitability by Jio too.

Thus, with above analysed and detailed, it can clearly be said that the huge sum of investment that Mr Ambani did in Reliance Jio was a well thought out plan and wasn't as risky as being thought out to be. Further to add, the revenue of Jio will only increase as the optical fiber network has a higher capacity and can be used for other services too in parallel (like music sharing, movie streaming, etc). Thus its clear that Jio is here to stay and turnaround the market as expected. The only way for others to compete is to improve their own efficiency, lower operational energy demand, diversify services, and may be switch to optical fiber network or a better alternative.

Wednesday, 17 January 2018

Blockchain, ICO, Mining, Bitcoin : What is this that people Talk of?

Blockchains, Initial Coin Offering, Mining, Bitcoin : What is this that people Talk of?
(Finally Back to writing after a hiatus)

Towards the end of the last year, we all read news of Bitcoin, the currency that rose up in value by almost 1500% in a year. FOMO (Fear Of Missing Out) crept in and many of us even started to look for opportunities and places to buy them. Not to blame, but this was so evident as the Crypto market in totality rose from a $19 Billion at the beginning of the year 2017 to $600 Billion at the end of year 2017 (source: Coinmarketcap). No market ever had seen such a growth. But the question still remains, what exactly is this technology and what has this technology got to offer. What let to rise in this technology, because of which  the crypto market saw a multi-fold investment.

Before we begin, it becomes important to know what block chain is. Blockchain, not just literally, means a chain comprising of blocks which are linked throughout the chain using a hidden language (you see, this is where the prefix "Crypto' came from). These links can be only be verified and build by those who are authorized to decode the language. This also means that, even if the data of the block chain i.e. blocks are given to any person, it is of no value as it cannot be deciphered, which is the most important aspect of this technology.

The relevance of this technology can be understood if we analyse the current practices & implications of the database platforms. Whenever we save any document in say our gmail or yahoo account, we entrust them with our data in a readable format in their terms and conditions, which become open to them to read and analyse.Them being free platforms, it becomes important to add a source of income in order to maintain and expand the platform and improve the user experience. How do they do that? Of course by selling the information from the data we have stored with them to the ones who want to buy them. I guess this explains why we see those ads on our browser when we search something on google or yahoo or even more recent, acquisition of watsapp by Facebook in a whopping $19 Billion deal. This clearly puts our privacy to risk and necessitates the need of block chain technology.

  On 31st October 2008, a white paper was published by some person named Satoshi Nakamoto (who in reality doesn't exist by the name) that proposed a peer-to-peer electronic cash system. This system aimed at introducing a currency that will surpass the financial institutions system and can be used as a form that can be directly be transferred as a form between the buyers & sellers. The white paper also laid down various principles and procedures on how this can be verified and put to use in real by laying down a network of transaction, called ledger, which will be stored in an open source, every CPU that runs with the client. Thus Bitcoin was one of the first currency that used this block chain technology.

Now a days, many startups & established institutions have started to come up with a product/ledger in offering have claimed to have the best public ledger based on block chain technology. The system they offer claims to solve a particular issue and give a different user experience. In order to fund this, they undergo an Initial Coin Offering, which is a means to raise a capital at a certain initial price without going through the strict and rigorous methods used by Financial Institutes. All is needed is a listing & trading platform.

Once the ICO is launched and coins are offered, manpower is needed to validate the transactions across the network by solving the complex equations and in return avoiding any double-spending (duplication as we know it). Miners also add more currency to the chain as time progresses up to the maximum limit as per the requirement of the network. 

Yes questions still arise on the legality or functionality of such networks as they work on a technology that cannot be properly monitored due to its nature of secrecy, but still people are will to use this as a mode, as it doesn't violate their privacy as being done by other database platforms.

With implementation of block chain technology in just a currency market, we saw a huge Cryptocurrency market in the field of currency. Just imagine what wonders can be done when the technology is applied in other fields. We may in future see a CryptoIdentity - which may solve the Adhaar security issue if any, CryptoChain - a supply chain solution, CryptoRide- a peer-to-peer secure ride sharing network, CryptoVote - a network to make election process faster & cheaper, CryptoWelfare - a network to transfer public benefits in secure and quick manner.

With above said, 2018 already seems so exciting.

Friday, 10 November 2017

Economic Growth Rate: Is Higher rate the Future course?

Economic Growth Rate: Is higher rate the Future course?

Recently, the debates are going on regarding the Economic growth rate. Some has said that economic is doomed where as some are saying that a correction in the economy is going on account of various measures being taken. If the side screaming that economy is doomed is believed, then the question comes into mind that if the economy will rise or will it fall further.

Before going further, here is the history of Growth rate for past 6 years, quarter wise.
If the history is seen, any economy's growth rate appreciated and depreciates in course and never continues to appreciate in a continuum. Further if details are studied it can also be noted that any factor that affects the market (bull market) of the economy also affects the growth rate of the economy. Hence can we use the tools that are used to predict the direction of market be used to predict the direction of growth rate? 

Yes there are various different factors that actually contribute to Growth rate, but if the analogy is seen with the Market due to the relative nature of the two, then so does for the market. But still various statistical tools have been able to predict the movement with a good success. So with the analogy on account of various factors, let us see if the history of Growth rate movement obeys the statistical approach used for the market and if so, what does it say about the future course. There is no conceptual proof of it to work for future, but let me make an attempt to see if it can used and if the future course falls in line, it will only strengthen the argument.

Some of the important tools use for the market to predict the movement are Relative Strength Index and Fibonacci Retracement. Relative strength index concept is a momentum indicator of market. The simple outcome of RSI is that once it goes up, then it should come done, thus dragging the market. Fibonacci retracement is a tools that predicts the various levels of rise or fall as per the Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% or 100%.
Note: Average period for RSI calculation taken 3 Quarters.
Now, if the history of Growth rate is studied, it can be noted that any rise or fall almost follows the Fibonacci retracements. Also if RSI, calculated on three quarter time frame, is seen it seems that the growth rate is also moving in in accordance. Whenever there has been a drop in RSI, there has been a cyclic rise, resulting in rise of growth rate as well. So historically it seems to be following the statistical methods, hence they may follow in future as well.

Now, coming to the future prospects, it can be seen that at current levels RSI for the growth rate stands at 13.6 which is very low. So can be clearly said that there is a very insignificant chance of it falling. For next few quarters, it will only rise, evidently resulting in improvement of the growth rate. Still inn case if there is fall, which is highly unlikely at current RSI, then the fall may be to the levels of 4.35 following the retracement of 23.6%.

Also, if Fibonacci retracements are drawn from the current low at 23.6% then it may jump to 7.05% within 2 or 3 quarters. If the stimulus for growth is strong, like the current PSB recapitalization, then it may rise to 7.9% as well following the 38% retracement or even 8.5% following 50% retracement.

However, any rise of growth rate, beyond 8.5% within next 3 or 4 quarters without a fall in the rate does not seem to be possible statistically as in that case the RSI may touch 85+ which means there has to be a small dip in subsequent quarter before rising as shown above.

So, from above, it can be said that a higher growth is possible statistically but a growth beyond 8.5% is highly unlikely within next 5 quarters, without any small dip. Also, like in the past, let's hope that the levels also respect the statistical tools. Once again, there is no surety that it will work, but if it does then we have a strong argument to use it as a part to predict as well.

Friday, 27 October 2017

Recapitalization of Public Banks: A Renaissance or A Bail Out?

Recapitalization of Public Banks: A Renaissance or A Bail Out?

Before starting, it is important to understand what Recapitalization is. It is a simple measure to alter the financial structure of a firm in order to make it better equipped to face the market and to discipline the business model for doing better business. In the case of our Public Sector Banks, it simply means to empower them to face the NPAs better.

Now coming to the topic, recently Ministry of Finance announced an INR 2.11 Lakh Cr Recapitalization into the public sector banks. Of the given sum, 1.35 Lakh Cr to be issue by Government as Recapitalization Bonds and balance 0.76 Lakh Cr to be raised from budgetary allocations and fundraising from the Market.

The measure was hailed by many, including all the leading banking and financial firms, but few also raised doubts. Such investment is pegged to help the Banks fight their current NPAs and clean their balance sheets which is well taken. However, doubts were raised on the account if government will raise such huge sum of money from external agencies as government has no such provision in their budget leading to huge debt. 

The given contrary arguments actually raise the question if the given step is a renaissance of the PSBs or just a bail out from their current bad loan situation with government getting deeper into debt.

Within one day of the announcement being made, the market rallied with all the major public sector bank share seeing huge demand. Almost all the public sector banks saw a surge by minimum 15%. This resulted in the influx of approx. 1 Lakh Cr as against a target of 0.76 Lakh Cr.

As already aware, during the exercise of demonetization around 15 Lakh Cr. cash was deposited with the banks which they were unable to lend at their previous levels as there was a slowdown in the Industrial output due to fall in demand. It is this same money that Government is now taking from the banks by issuing Recapitalization Bonds to that bank, amounting to 1.35 Lakh Cr. 

The capital generated by issuing recapitalization bonds will be infused into the public banks as equity of government. These bonds will have an additional cost implication of approx. INR 8000 Cr per year (assuming Reverse RR). Also the capital generated will appear as a debt in the books as the budgetary provision for the same has been only INR 18,000 Cr (budgeted in previous budget, lying un-utilized) and thus raising concerns over the Fiscal deficit target of 3%.

The union budget for the financial year 2017-18 was presented in 1st Feb 2017 in which the total revenue collection of the government was estimated as INR 19.11 Lakh Cr. The direct tax component was 9.8 Lakh Crore and the indirect tax component was INR 9.31 Lakh Cr. During the budgetary exercise, the impact of Operation Clean Money (result of Demonetization) and Goods & Services tax might not have been considered as trends and data for both the cases were not clear.

If the Direct Tax collection is analysed now with the current numbers and figures of Tax base, it seems that government may end up with the figure of INR 10+ Lakh Crore as against a projection of INR 9.8 Lakh Crore in the union Budget. ( For Details: Demonetization:impact on direct tax )

In the Union Budget, total collection of Indirect Tax was projected to be INR 9.31 Lakh Cr of which Customs comprised INR 2.45 Lakh Cr, Union Excise Duty comprised INR 4.07 Lakh Cr., Service Tax comprised INR 2.75 lakh cr. and UT taxes comprised 4679 Cr. With implementation of GST, the Excise Duty and Service Tax were abolished and the projected figure for Central GST became 6.82 Lakh Cr. However if current collections figures of average 93,000 Cr per month, which is by only 65% of registered firms, is interpolated for the financial year assuming only 85% of them filing GST for the financial year 2017-18, then the given figure stands at approx. 50,000 Cr more than the budgeted figures of 6.82 Lakh Cr.

It can be clearly stated that the principal of INR 1.35 Lakh crore in the books of government can be written of with 2 to 3 Financial Terms, which is the risk government seems to be taking in order to give a push to the banking reforms. But with above said it seems clear that government may not be able to stick to their Fiscal Deficit target of 3%.

With this having been said, it seems pretty clear that the recapitalization may not just be a bail out attempt of the Public Sector Banks by the Government, by taking the risk of debt on themselves, but an attempt to lead them to fight their NPAs by absorbing the losses on account of the NPAs with government having backup resources to write of the debt. However, with such a huge being invested, it's also now the responsibility of the government to come out with stricter norms of lending to avoid any NPAs in future.

Monday, 23 October 2017

Demonetization: Impact on Direct Tax

Demonetization: Impact on Direct Tax

A lot has been said in the media by many economists and bureaucrats in last few months regarding the adverse impact of Demonetization and Goods & Services Tax on the economy. Many have gone on record to say that the Economy has been destroyed. However IMF defers from it in spite of revising the growth from 7.3% to 6.7% and calling it a blip. Even the global financial service, Morgan Stanley, firm has stayed positive on the economy. These contradicting views still keeps the doubt in mind if the exercise was really good?

From the point of view of direct taxation, the story seems a bit different.

If history of direct taxation is analysed it can be seen that something was not right. The average rate of growth in direct tax collection for past seventeen year was 17%. However, if the same is seen for past 8 years, it was only 10.65% or for past 5 years, it was only 8.74% or for the matter of past 3 years, it was further down to 6.89%.  After demonetization, however, it has gone up drastically to 15.3% for one year, considering the provisional figures as presented in the Union budget. This clearly explains that income tax was not being declared by many, in spite of rising working class and wages in last 17 years.

Further, if one analyses the Direct tax as a component of Total Tax revenue collected as on date, it also shows an irregular trend.
It was on constant rise till 2010, but after that it has been falling in an irregular manner. However, after the exercise of demonetization, it seems to have shed the trend of fall and has started to rise which again points back to the corrupt practices which existed earlier.

If the number of individual taxpayers are seen, than one can easily see that the number is on constant rise. For instance, the number of individual tax payers has gone up from 2.22 Cr to 2.79 Cr, a rise of 25%, as on 7th August 2017 as per the official press release of Central Board of Direct Tax.

The total tax Direct Tax collected in the financial year 2016-17 was INR 8.46 Lakh Cr., in which the rise in the last quarter from its previous one stood at 29.6%, which may be attributed to the exercise of demonetization. Even the provisional figures for the current year's budget stands at INR 9.80 Lakh Cr. If the till date collected figures for the Quarter ending in September 2017 are seen, it stands at INR 3.86 Cr, 18% more than the collection for the same quarter in the previous financial year.
If we interpolate the same as per average growth rate from April 2016 to Dec 2016 (as beyond that, demonetization impacted the collections) on accounting rising number of individual taxpayers and IT Department's 'Operation Clean Money' drive the value goes past INR 9.80 Lakh Cr comfortably.

If we assume the collection as projected, i.e. INR 10.48 Lakh Cr, it is around 70,000 Cr. more than the projected figures by government in the union Budget, which means we can actually expect the government to abolish the Income Tax for people earning up to INR 9,00,000 per year (AY 2014-15 data considered as latest authentic data is unavailable) which may come as a big relief to the people and may also help governing political party in future elections. Also this will increase spending and will give industries a much needed push. Although this is just an interpolation of an assumption, but the possibility cannot be ruled out as well as the exact data regarding the number of tax payers were not clear during the preparation of union budget.

On a holistic view, the exercise does seem to have created some short term jolts to the economy but the long term benefits seem to be much favourable, to the government in terms of revenue which can be spent on various social schemes and if the trend continues, to the middle class population as well if government relaxes the limit of the taxable income by certain amount.

Tuesday, 10 October 2017

The Science of Foreign Debt Loans

The Science of Foreign Debt Loans

In last few years, we are hearing a lot about foreign investments in our Country. From Manufacturing to Infrastructure, from Government to Non-government sectors, all the sectors are at some point taking loans from different foreign entities. As charted below, it can be seen that the debt figures are growing at an average rate of 7.30% year on year.

Any government that comes to power always announces any form of such investment by any external agency proudly, with a lot of pomp and show. With the figure currently standing at around 19% of our Gross Development Product, it becomes important to understand, drill down and see if it will have positive or negative impact on us.

Most of the loans taken by India are either for Government Loans or Non-government Loans. Most of these loans are in form of Commercial Borrowings, Non- Resident Indian Deposits, International Monetary Fund Loans, Bilateral or Multilateral borrowings, etc.

Most of the Non-government borrowings are by private corporate entities who avail it for their business expansion. However, the case with Government borrowing is different, as it is required for various social & economic development projects which have very low revenue generation capabilities. As a result, viability of the borrowings, the repayment of the debt and entity from which the loan is taken becomes a critical issue, which if not taken care may have adverse effects.

Now coming to the Government loans, most of the loans in our country is from World Bank, Asian Development, European Institutes or Japanese Institutes. Globally even China is known to be major investor. A basic in-depth analysis of their economic status, term-loan policies and central bank rates reveals the purpose of giving loans. While World Bank & Asian Development Bank were created to help poor countries reduce poverty, foster economic growth and cooperation, the same doesn't seem to be the case with other Institutions from Japan, Europe or China as they claim. Their purpose of giving loans seems to be something else as seen from the given chart trends.
As it can be seen in European nations, Japan or US, the Long term borrowing rates seen to be reducing. If the same is rate assumed and interpolated for next decade, it can be easily said to go negative. Which means that banks will start charging interest even for the deposits, which is not good for any growing economy. Hence these countries are giving long-term loans at interest rates ranging from 0.1% to 2.5% as it will ensure their money value at least remains static and they continue to grow, even if marginally. So giving such loans are their need as well.
Even the trends of central bank rate strengthen the fact that for most of the European nations and Japan, giving infrastructure loans are their need. This serves the interest of both the entities involved i.e the institution giving the loan and the entity receiving it. However the interest rates of loans extended by China, varying from 2% to 4% (link 1 ,link 2), seems different as it is well below their own Central bank rate. In this case, mutual interest doesn't seem to be the prime motive. This when seen in line with Tajikistan (ceding land china on account of non-repayment), Sri Lanka (Mattala Rajpakasa International Airport being declared world's emptiest airport and unable to generate revenue) and Cambodia (almost 80% of its total debt owed to China) cases rings the bell. It seems more of like a debt trap than a development loan.

The risk any term loan carries is the risk on account of Forex rate. Most of the term loans availed by the borrowers are either in Dollars, Euros or other global currencies and not in their local currencies. Which means due to varying exchange rates, an additional risk on account of Exchange rate becomes a major factor. The extent of impact may even overshadow the lower interest rates by the lender and needs to be checked on timely basis.

Keeping this mind, whenever any government announces any loan with pomp and show, one should study the different aspects and conditions as mentioned and then make any pronouncement regarding the loan/investment availed as growth is good only if sustainable. Not doing so may expose to the risk of falling into the unending debt trap as seen in many cases.