Clearing dues from the government

The release of pending dues from statal entities can itself be a fiscal stimulus

Economics textbooks tell us that when you sign a contract with the government to supply goods, perform a service, or lend money, that contract carries no counterparty risk because the government’s “sovereign risk” is believed to be zero — it will always have the money to pay you. The sovereign cannot default!

The reality in this country is, of course, quite different. Across a range of sectors in the economy, companies have found the hard way that governments can delay payments for various reasons. Any company dealing with the government today (central or state) — whether a micro, small, and medium