22.8 ndian onom
The distressed assests, in this way come back to productions are high. Since crops arrive in the
bank, may be with a lower profit element to them. market during the busy season, prices generally are
Such an announcement was made by the RBI on the downward drift. It is the seasonal variation
in 2014–15 allowing bullet repayment of loans in the arrival of crops in the market, in the context
extended against pledge of gold ornaments and of steady demand, that causes prices to fluctuate
jewellery for other than agricultural purposes. during the year.
The above pattern has been severely modified
bullion in recent years. The government borrows both
during the slack and the busy seasons. Industry
Precious metals such as gold, silver, and platinum too is active in both the seasons. Because of greater
that are traded in the form of bars and coins for storage and stocking facilities, the variations in the
investment purposes and are used for jewellery as flows of agricultural products have been reduced.
base metals. Money supply expands continuously and prices
are generally up throughout.
See the chapter with the same title. buyer’s mArket
A short period of market situation in which there
busy AnD slAck seAsons is excess supply of goods/services forcing price fall
The monetary authorities face the challenge of to the advantage of the buyers.
keeping the growth rate as high as possible, at
the same time putting burden of adjustment on buyouts
luxury and unproductive consumption. Monetary Private equity (PE) investors participate in two
policy is an instrument in this respect. However, types of buyouts of firms (a PE-backed buyout
the right policies may not be palatable to the simply means that the PE investor takes a
political and fiscal authorities, which is a serious controlling stake i.e. between 50–100 per cent in
problem for the economy. a company):
From May beginning to end of September is (i) Management Buyout (MBO): In such
the slack season and from October beginning to buyouts, the PE investor usually helps the
end-April is the busy season of the Indian Economy. existing management of the company to
During the slack season, crops are generally sown. buy out the promoters of the company.
Agriculture and related businesses are slack and In return, the PE investor takes a majority
loans taken during the previous busy season tend stake.
to be returned. Consequently, the growth rate of
(ii) Leveraged Buyout (LBO): In such buyouts,
money is low or negative. Governments usually
a large portion of fund in acquiring the
borrow heavily during the slack season, since the
company is financed by debt–the normal
demand for credit from the commercial sector
ratio being 70 per cent debt and 30 per
is not very strong. Since there are no fresh crop
arrivals in the market and the demand for crops
is steady, the prices are expected to be generally
upward in the slack season. cAmels
From October, the busy season commences An acronym derived from the terms capital
and both agricultural and related industrial adequacy (C), asset quality (A), management