Govt's ingenious ways to milk PSUs

Minority shareholders' interests are often ignored in the process

While falling inflation has many beneficial effects, indebted corporates may run into debt traps if it comes down sharply. Profits are calculated on nominal revenues. Interest is levied on the nominal value of loans. As inflation drops, nominal revenues and profits also drop. This is one reason — not the only one, by any means — why non-performing assets have risen, as inflation has reduced. 

Similar, more frightening things can happen to government debt in deflationary situations. As inflation reduces, nominal Gross Domestic Product (GDP) growth rates reduce. If the nominal GDP growth rate dips below the rate of interest paid