22.52         ndian    onom
     ‘unsecured’ loan. Such loans are also known          may have an ‘upward-sloping demand curve’ as
     as—signature loans and personal loans. If the        opposed to a ‘downward-sloping demand curve’
     loan is supported by some form of collateral (of     because they practice conspicuous consumption
     secondary type, such as land, building, etc.), then  (a downward - sloping demand curve means that the
     it is ‘secured’ loan.                                quantity demanded varies inversely to the price i.e.
           Basically, loans are provided by banks against demand falls with price rise). The concept suggests
     two kinds of securities—the creditwothiness of       that quantity demanded of a particular good
     the borrower (known as the ‘primary security’)       varies directly with a change in price (i.e., as price
     and collateral (known as the ‘secondary security’).  increases, demand increases).
         usury                                               velocity of circulAtion
     Charging an exorbitant rate of interest or even      A measure of the average number of times each
     charging interest. Decried by many ancient           unit of money is used, to purchase the final goods
     philosophers and many religions, today most          and services produced in an economy in a year.
     modern economies have some law regulating the
     upper limit of the interest rates and they consider     venture cApitAl
     interest as a reward to the lender for the lending
                                                          Generally, a private equity capital which lends
                                                          capital to the entrepreneurs who are innovative
                                                          and cannot get the required fund from the
         vgf                                              conventional set-up of the lending mechanism.
     The Viability Gap Funding (VGF) is a fund                 In India, it was the Government of India
     assistance facility provided by the GoI to the       which did set up the first such fund in 1998–the
     private players in the infrastructure projects being IVCF.
     developed under public private partnership (PPP).
     The fund is given by the GoI as one time ‘grant’        vulture funDs
     and it could be maximum 20 per cent of the
     project cost (in special cases an additional 20 per  Vulture funds are privately owned financial firms
     cent might be approved by the ststes/ministries/     which buy up sovereign debt issued by poor
     authorities).                                        countries at a fraction of its value, then file lawsuits
                                                          (sue) against the countries in courts, usually in
           The facility which was operationalised in
                                                          London, New York, or paris, for their full face
     September 2006, was aimed at attracting private
                                                          value plus interest.
     investment towards this socio-economically
     desirable sector. Several infra projects were             A paper prepared for IMF/WB (October 18,
     economically ‘non-viable’ which used to discourage   2007) showed that there are now $1.8b lawsuits
     private players away from such projects—this         against poor countries where people typically live
     facility encourage them to take part.                below $1 a day; 24 countries that have received
                                                          debt cancellation under Heavily Indebted Poor
                                                          Countries (HIPCs)initiative, 11 have been
         veblen effect
                                                          targeted by such creditors (i.e., the VFs) and they
     Named after the American economist Thorstein         has been awarded just under $1b.–money which
     Bunde Veblen (1857–1929), this is a theory of        have gone for schools and hospitals; they are
     consumption which suggests that consumers            neutralising the good deeds of WB/IMF. As per