Payment Discipline is rare thing in Indian Corporate Sector. The Managers seldom realize that timely payment to the supplier can ensure better service, better quality of goods at much reduced rate. This will not only improve the quality of the end product, but also the reduction in costs due to better utilization of machinery and spares.
Low quality of goods and services along-with poor packaging is the reason behind our huge trade deficit as we are not competitive enough to export. Further, poor quality of feedstock at high cost by large corporates also reduce the competitiveness of MSME sector too.
If we analyze the Balance Sheets of Indian Corporates and Subsidiaries of Foreign Companies in India., We will find Indian Corporates not only Debt-laden, but also run high current liabilities in comparison to their purchase of goods and services.
We badly need capitalization of Indian Corporate Sector by way of more equity funding, than debt funding. We have hardly found any IPO or FPO from Corporate World to fund their capital needs. They rely more on debt and suppliers' outstanding for expansion.
This has also slowed down the industrial growth and ultimately job creation. Let us hope that somebody saner will take the lead.
