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Window dressing India

“Window dressing is either a blatant lie or a half-truth, both of which are not permissible”


The Indian economy has been a victim of rampant window dressing by corporates, which was done by the promoters/management and all others supported it knowingly, whether it be auditors, independent directors, rating agencies and others.  It was systematic collusion that perpetrated the giant manipulation for years.

So what does this window dressing mean? It means to deliberately manipulate the financial statements and reports in order to show a rosy picture of performance, profitability and financial position. It is the fudging of facts, to show a better or exaggerated performance/position and to show an improved and favourable financial position.

Window dressing is either a blatant lie or a half-truth, both of which are not permissible. Corporate India has been infested with it, of which ILFS is the poster child and it was not just the borrowers who did it. The banks too window dressed their financial statements, by hiding their NPAs and losses and most banks have been found to be guilty of this crime.

Window dressing is unsustainable beyond a point and that explains the twin balance sheet crisis that India faces, where the balance sheets of the bank, as well as the borrower, are financially stressed, such that one cannot lend and the other is not eligible to borrow.

But it is not just corporates and banks which are guilty of this misconduct. The government indulges in it all the time, in order to show, a rosy picture of its performance and of the economy too. The government’s window dressing is done by not acknowledging a problem (because that would be construed as its failure), then giving doctored statistics/data to prove that all is well and then instead of coming up with suitable long term solution, coming up with short term quick fixes and band-aids, that only generate political euphoria and provide no lasting solution, due to which the problem aggravates into a crisis.

Take the classic case of unemployment which is at a 45 year high and is there to see, but is yet denied by the government. The figures could be exaggerated a bit, but the crisis is being felt on the ground, despite the PM’s claims that 13 crore Indian have taken MUDRA loans, which he says has provided them employment. MUDRA loan in a political quick fix, it is infested with unrecognised NPAs and is no solution to India’s festering unemployment problems.

So here are some of the instances of window dressing by the government, known in public domain:-


  1. Doctored statistics of unemployment and GDP growth, to deny an economic slowdown and a job crisis.
  2. Off the budget raising of funds through PSUs like FCI, NSSF, Railways etc. and postponing payments to prove that fiscal deficit targets have been met.
  3. The 59 minutes loans scheme as a solution to the MSME crisis.
  4. The populist political schemes like PM Kisan, as a solution to the rural crisis,
  5. MUDRA loans and their exaggerated benefits, with reluctance to recognise the bad loans therein.
  6. EODB rankings to claim that ease of doing business has improved.
  7. Claiming that the IBC code has been resolving the NPA crisis.
  8. Interest rate cuts as a total solution to the economic slowdown.
  9. Tax collection targets met by withholding refunds.
  10. Recapitalising banks to get them in business, instead of curing their ills, by improving their management and efficiency.


Like in the case of a company, window dressing cannot be sustained for long and reality catches on and when it does, these rotten corporates simply collapse as we see in the case of ILFS, Bhushan Steel, Sterling Biotech and so many others. That happens in the case of a country too, except that in that case due to political jingoism, window dressing gets sustained for a longer period. Thus while the statistical window dressing goes on and our problems aggravate, issues like abrogation of Article 370, the arrest of Chidambaram, target for a USD 5 trn economy, ED questioning Raj Thackeray etc. are a political window dressing which keeps engaging the common man’s fancy, such that he is distracted from the real economy and is put in a state of nationalist euphoria.

Watch: Business Tit-Bits: Window dressing India

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