New companies law makes cross-financing tougher
One of the avowed objectives of the new Companies Act, 2013, is to provide Indian companies with an evolved legal framework that is attuned to international standards. Needless to say, the new Act affects all constituents of the economy at a fundamental level including manufacturers, service providers, financing institutions and everything else in-between. In this context, it is interesting to analyse how the new Act affects cross-financing among companies and to question whether it’s actually conducive to growth.