The United States debt ceiling has been a topic of intense debate and controversy over the years. being the world's largest economy, the U.S. government's ability to borrow money is crucial for funding its operations and meeting financial obligations. However, the debt ceiling has often been a source of political battles, with lawmakers using it as a tool for negotiation and posturing. This article aims to critically examine the United States debt ceiling, its implications, and the need for a more rational approach to managing the nation's fiscal affairs. The Concept of Debt Ceiling The debt ceiling is a legal constraint set by Congress that restricts the extent to which the U.S. government can borrow funds to finance its activities. When the government reaches this limit, it cannot borrow more money unless the debt ceiling is raised or suspended. This limit is intended to prevent excessive borrowing and promote fiscal responsibility. However, it has often become a politica...
What is IL&FS: IL&FS is a shadow bank. A shadow bank is a financial institution which is a non-depository bank, meaning it doesn’t receive deposits like a traditional bank. Non-deposit banks includes NBFC (Non Banking Financial Companies) and Investment Banks. As these non-deposit banks doesn’t take deposit, it has largely escape regulatory oversights. IL&FS is a 30 years old, one of the india’s leading infrastructure development and finance company. State owned LIC (Life Insurance Company) is its largest stakeholder with 25.34% stake, Orix, a japnese company holds 23.54%, Abu Dhabi Investment authority holds 12.56%, HDFC holds 9.02%, Central Bank holds 7.67% and SBI holds 6.42% of stake. Problem: IL&FS has been defaulting on payment since end August 2018, means it is unable to meet its re-payment obligations of 395 crore. PTI reports, IL&FS defaulted on short tern loan of 1000 crore from SIDBI, while its subsidiary has also defaulted on 500 crore dues to...