Forget Parliament outrage, both Congress and BJP are responsible for delay in bringing Mallya to book

So finally, the question of what is the fate of Rs 9,000 crore public money that states-run banks lent to Vijay Mallya, has finally reached Parliament — some four years after the loan became an NPA (non-performing asset) and after the man in question has flown away to safe shores.

vijay-mallya-parliament_AFPThe silence of political parties — be it the ruling BJP or the principal opposition Congress — on the issue so far, lacked any logic. The money in question ultimately belongs to the public — the depositors. The sad part is that failure to recover loan dues from large defaulters like Mallya, would mean that the same taxpayer will have to bail out the banks for the resultant losses using his tax money.

Hence, the issue warranted political attention, not just in Mallya’s case but for the recovery from all large defaulters, especially given that the RBI-ordered clean up exercise is currently on.

The immediate logical question is why it took so much time for the country’s top politicians to realise the gravity of the bad loan problem faced by Indian banks and the tactics played by crony promoters like Mallya, who have taken the banking system for a ride?

After observing silence on this issue until now, Congress Vice-President Rahul Gandhi and Leader of Opposition Ghulam Nabi Azad have hit out at the Narendra Modi government for letting Mallya escape the country.

“My charge against this government is that when so many agencies were interrogating him (Mallya), why was he not arrested, why was his passport not confiscated,” Azad said in Rajya Sabha.

This was followed with a series of tweets by Gandhi on the issue asking how the government allowed “Vijay Mallya, who owes Rs 9,000 crore to banks, to leave the country". Gandhi also brought in the comparison of what would have happened to a common man who is forced to commit ‘chori’ (usko aap markar andar kar dete ho) and “the big businessman who loots Rs 9,000 crore is sent to Engalnd in first class. What is this happening?” Gandhi asks the Modi government why somebody who is under CBI’s look out notice is still in Rajya Sabha and wants Mallya to be prevented from going out of the country.

Rahul Gandhi’s emotional outburst and his willingness to raise questions, at least now, is welcome. But Gandhi should first ask his own party, who was ruling the country for the last one decade that why Mallya, in the first place, was given a soft approach by the government banks (huge amount of loans despite being a loss making airline, restructuring facility and soft approach in recovery process) except in the last few months? Remember the Kingfisher loan became an NPA in 2012.

No major steps were taken by any banks all these years against Mallya until recently when the bad loan became a big buzz word in Parliament and banks were almost on the verge of facing an industry crisis. Why the UPA government, both I and II, let the government banks to go ahead with a risky lending to an airline that never made a profit in its eight year-life, take further exposure, even when the company and its promoter were in news mostly for wrong reasons mostly?

Gandhi should also do a self-introspection on why he failed to notice all these while that had a direct implication on public depositors (and taxpayers). What is the rationale for waiting to a point when banks have little chance to recover the money and the man in question is no longer in the country? Didn’t Gandhi see that Mallya was present in Parliament on 1 March?

Question to BJP

While Jaitley’s retaliation to Azad in Parliament on Tuesday that the loans to Mallya were given during the UPA-rule is true, this is no excuse on the NDA government’s oblivious attitude to the issue in the 20 months of its rule. The NPA problem in the banking sector is not a recent phenomenon and has been one of the major challenges of the Modi government ever since it came into rule.

The simple reason: A considerable amount of capital from the state exchequer goes to repair the cracked balance sheets of state-run banks. The government, logically, is answerable to the taxpayer on why efforts were not being made to recover loans from large corporate defaulters, who constitute majority of the Rs lakh crore NPAs in the banking industry and an equal amount of restructured loans.

Had the government wanted, it could have initiated investigations and legal proceedings against Mallya, who has openly challenged the whole system, using the machinery at its disposal. Even the investigation from the Enforcement Directorate came much late giving room for Mallya to plan his future moves. Can Jaitley explain the delay in taking the action on Mallya?

The bottomline is this: The blame game between Congress and BJP in Parliament on who aided Mallya first in securing such large chunks of loans and then escape the country on Thursday is merely the art of passing the buck. The fact is that both are responsible for the problem. What is needed at this stage is strong political will to bring Mallya back to the home soil, make him answer to the law of the land and recover the Rs 9,000 crore public money at stake. The mud-slinging fest can happen later.

Updated Date: Mar 11, 2016 08:20 AM

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