The Chinese have coined the expression “Grey Rhinos” for are a clutch of Chinese tycoons who have used a combination of political connections and cheap credit from State-run banks to build their foreign empires. Initially, with State support and subsequently by themselves, the Grey Rhinos acquired a host of businesses outside Chinese shores. They are now so big, so complex, so indebted and so enmeshed in the economy that the Chinese Government finds it difficult to control them and has declared Grey Rhinos as a threat to the stability of the economy.

Herds of Grey Rhinos abound in India but the Government steadfastly refuses to acknowledge their presence. The closest the Government has come to recognise the menace of Grey Rhinos was in the Economic Surveys of 2015-16 and 2016-17 which euphemistically labelled their depredations as the Twin Balance Sheet (TBS) problem and identified it as the biggest drag on the Indian economy.

The Twin Balance Sheet problem arises when businesses borrow beyond their repaying capacity leading to un-repayable loans in their balance-sheets and irrecoverable debts in the balance-sheet of the lending banks.
The Economic Survey diplomatically stated that the TBS problem arose due to a combination of historical and psychological factors omitting to mention the real reason for the TBS problem ~ reckless borrowing by businesses and reckless lending by banks.

It is obvious that TBS or its offshoot, Grey Rhinos have their origin in the lack of integrity which imbues the Indian psyche. If businessmen were really honest they would never have borrowed beyond what they could repay. On the other hand, if bankers had a modicum of integrity, they would not have lent to sinking ventures. Bankers have tried to justify such loans as “errors of judgement” but considering the volume and number of such loans, this explanation rings hollow. Everyone who has taken a loan from a bank knows how difficult it is to make the bank loosen its purse strings even for a few lakh rupees but businesses which were obviously floundering could manage loans of thousands of crores rupees ~ just like you and me quake before the passport officer but any gangster worth his salt has at least ten passports under his belt.

It is a mixed blessing that the exploits of Indian Grey Rhinos are mostly local. This makes the Grey Rhinos more amenable to Government control but at the same time endangers Indian jobs should the Rhinos be forced to shut shop. This dilemma has forced the Government to direct banks to take action only against some select defaulters.
Even today, after the Indian Grey Rhinos have been named and shamed, Papa and Mama Rhinos are often found in European watering holes while Baby Rhinos zip around in latest high end imported cars. A certain Grey Rhino is busy working the London social scene and thumbing his nose at the Indian authorities. Such crass display of borrowed wealth shakes the trust of the common man in the system. When questioned about the Grey Rhinos, politicians merely narrate scandals of Opposition parties when they (the Opposition) were in power.

The lack of a healthy work ethic amongst Indians is responsible for the present imbroglio. Somehow, the average Indian is convinced that he is the most intelligent person around and it would be a shame if he had to work for his bread and butter. The peon in the office would play truant, the clerk would invariably misplace the relevant file and whenever you visit a Government office you would invariably be informed that the concerned officer was in a meeting or visiting another office.

Unfortunately, the private sector is equally plagued by this malaise. Perhaps, the Government being the largest employer has passed on its work culture to the private sector. Except for a better dress sense amongst employees and a snazzier office building, there is little to differentiate between a Government office from a private office.
The productivity of any private sector enterprise in India is much less than that of a similar enterprise located abroad. This is the reason why after the opening up of our economy, many of our businesses folded up. The businessmen concerned kept their businesses running ~ not with the hope of revival but to enjoy cheap credit and the tag of big businessman. It is futile to blame the Government or its policies for their failure because as Julius Caesar had said: “The fault, dear Brutus, is not in our stars, but in ourselves.”

The immediate solution to the problem of Grey Rhinos is likely to be writing off their loans, restructuring their enterprises and banning Grey Rhinos from future business enterprises. But it is doubtful if the Government can ever reach the hidden treasures of the Grey Rhinos. Similarly, looking to the numbers involved the delinquent bankers would also be let off lightly.

Obviously, much more has to be done if we want to prevent another generation of Grey Rhinos to come up. We would have to drill in the concept of a healthy work ethic in office workers, businessmen, bankers, politicians and civil servants; which would mean inculcating the virtues of integrity, responsibility, quality consciousness, discipline and teamwork in our workforce and framing rules that would reward these virtues. No doubt, a tough task but a necessary one.

(The writer is a retired Principal Chief Commissioner, Income Tax)