I had, in my blog dated 29th August, 2018 on the Rafale deal, exposed each one of the falsehoods stated by the Congress Party. The campaign of falsehood is entirely led by the Congress President. His strategy is simple " concoct a lie and repeat it as many times. This, at least, provides him some concocted material for his statements/speeches for otherwise an issueless Congress.
To each of the Rafale questions raised by me, there has been no reply. In mature democracies those who rely on falsehood are considered unfit for public life. Many have been banished from political activity because they were caught lying. But this rule obviously can't apply to a dynastic organisation like Congress Party.
If the 'Rafale concoctions' were the first big lie, the second one stated repeatedly is that Mr. Modi waived off rupees two lakh fifty thousand crores of fifteen industrialists. Every word of that sentence repeatedly uttered by Rahul Gandhi is false.
Firstly, these amounts were lent by the banks prior to 2014. Secondly, the UPA Government, in order to conceal these loans despite the default, kept rolling over the loans. These loans were ever-greened. Today the UPA leaders stated that when they went out of Government, the Non-Performing Assets (NPAs) were only Rs.2.5 lakh crores. The truth is that actually NPAs were hidden under the carpet.
In 2015, an asset quality review was conducted by the Reserve Bank of India and as a result of AQR and subsequent transparent recognition by banks it was found that the NPAs were actually Rs.8.96 lakh crores and the real amount was being hidden. Thirdly, no effective steps were taken which could result in recovery/ reduction of the NPAs.
Post 2014-15, NPAs increased not because more monies were lent but because interest was mounting up on the overdue amounts. Some of the defaulters were given a second restructuring so that the defaults could continue to be hidden.
An account is a 'performing account' as long as the debt is being serviced by principal/interest being paid. The moment a debtor is unable to service the debt, a default occurs and on expiry of 90 days an account is declared a Non-Performing Asset. During the UPA, most of these accounts were not declared as NPAs.
The Effective Move
The only effective move which has taken place in this regard is the Insolvency and Bankruptcy Code (IBC). It has changed the debtor-creditor relationship in India. After the passage of the IBC, the creditors can move the National Company Law Tribunal (NCLT) which, upon admitting the petition, appoints resolution professionals and replaces the defaulting management.
Thereafter, the creditors come out with a resolution plan where bids are invited for a potential takeover of the company, and a solvent claimant whose bid is the most attractive, is given management of the company. This results in discharge of a significant amount of debt which is paid to the banks and other creditors.
In some cases, the bidders are likely to pay in foreign exchange which, in today's context, is extremely helpful to the Indian economy. The Reserve Bank of India, in the first instalment, identified twelve major defaulters. These twelve defaulters, towards principal interest and penal interest, jointly owed about rupees three lakh crores to various banks.
The banks under UPA took no steps to recover these loans. They did not prosecute a single major debtor who had siphoned off money. It is the NDA Government which through IBC, changed the debtor-creditor relationship and enabled the banks to effectively pursue the recovery.
The truth, Mr Rahul Gandhi, is that your Government allowed the banks to be looted. The loans were inadequately securitized. Your Government was in complicity. The recoveries are being done by the banks only now. By repeating a lie on several occasions, you can't change that reality. Not a single rupee of any debtor has been waived.
The defaulters are losing their companies and assets under the IBC. Some are being prosecuted. All these defaulters got their debt in the pre-2014 era. Many got their limits substantially expanded during that period. Though these defaults occurred in the pre-2014 period, the same remained hidden on the pretext of rollover, restructuring and ever-greening. I am enclosing a list of defaulters and the present position of recovery.
You lied on the Rafale deal, you lied on the NPAs. Your temperament to concoct facts raises a legitimate question " do people whose natural preference is falsehood deserve to be a part of the public discourse. Public discourse is a serious activity. It is not a laughter challenge. It cannot be reduced to a hug, a wink or repetition of falsehood. The world's largest democracy must seriously introspect whether public discourse should be allowed to be polluted by the falsehood of a 'Clown Prince'.
This article first appeared on Finance Minister Arun Jaitley's official Facebook page.