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The Modi government is frequently accused of its close
relations with the Indian corporates. it is alleged to be not only is soft
towards them, it also works in favour of them by exempting them from paying
taxes amounting to thousands of crores. Rahul Gandhi is one prominent
politician who frequently says that Modi cannot see poverty and the poor in
India; all his attention is always towards his rich friends in the corporate
world.
In point of fact, the allegations do not seem to be
correct as it was recently reported that the Indian corporates are selling off
their massive assets in order to pay back the loans that had remained unpaid
till now. It may be recalled that the Indian banking system has accumulated
hundreds and thousands of crores of loans that have become its non-performing
assets, primarily because the corporate sector has not paid back the huge
amounts it had taken from various banks. These loans were taken during the Congress
rule which Modi had occasion to refer to as “phone banking” by politicians and
senior bureaucrats.
As The Hindu put it, “for sale” tags are now visible
on big ticket industries like, among others, airports, roads, ports, steel and
thermal plants, refineries, cement units. etc. The Hindu reviewed the corporate
houses that had taken billions in loans and came across results that were
startling,
A snapshot of the review is given below:
1. Anil Ambani’s Reliance Group is sitting on a
pile of loan of Rs. 1,20,000 crore. The assets put out on sale are transmission
towers, optical fibre related infrastructure from Reliance Communications, its
flagship firm. It has also decided to sell from Reliance Infra 49% in
Electricity generation, transmission and distribution in Mumbai and its Cement business to Birla. It is also looking to sell its entire portfolio of road
projects valued at around Rs. 9000 crore.
2. The two Ruia brothers of Essar
Group have accumulated a debt of more than Rs.1lakh crore. Ruias have been
notorious for their reluctance to pay back their loans. Now they are out to
sell Essar’s huge stake in its steel business and 49% of its stakes in oil to a
Russian oil company. Essar Oil and Essar Steel account for one-third of the
Group’s debt.
3. The JP Group’s debt is over Rs. 75000 crore. The
company is looking to sell its cement plants and is contemplating to put out on
sale its interests in the Yamuna Express Highway, thermal power plants besides
its land parcels. The company seems to have gone broke.
4. GMR was reported to be the
first among the debtors to sell off assets to pay back its hefty outstanding
loans. It has already offloaded its stakes worth Rs.11000 crores in road
projects, South African coal mine, Istanbul Airport, a Singapore Power Project
and 2 Coal Mines in Indonesia.
5. The Lanco Group has sold its
power plant in Udipi. The debts of the company have been rising from its
current outstanding of Rs. 47000 crore. It is planning to sell more thermal
power plants and its interests in an Australian coal mine to reduce its debt
burden.
6. The Videocon Group is aiming
to reduce its debt to Rs. 29000crore from the current figure of more than Rs.
45000 crore. It has already sold its spectrum rights to Bharti Airtel for Rs.4600
crores and is selling its stake in Mozambique gas fields for Rs. 15000 crore.
7. Jindal Steels is selling 49%
of its business of supplying rails to the railways of various countries. Only
50% of the capacity of his Raigarh plant is being currently utilized. Naveen Jindal is also selling 1000 MW power
plant to his brother. He is also contemplating to sell his other assets to
reduce his debts of Rs. 46000 crore.
8. The Sahara Group is in real
trouble. Its chief had even to go to jail for not meeting the obligations its
firms had bargained for. Its sell-list now contains as many as 86 real estate
assets, a 42% stake in Formula One team Force India, Grosvenor House, London,
the New York Plaza Hotel, the Dream New York Hotel and Sahara Hotel in Mumbai.
It is also selling it four airplanes.
9. By now everyone knows that nearly
all of Vijay Mallya's Assets are up for Sale. The loans obtained by exercising
political influence are now being recovered by the method of attachment of his
several high value properties and assets.
These are only some of the major
instances of recoveries for loans amounting to lakhs of crores. There are many
other smaller fries that operate below the radar and are able to escape
scrutiny. But the point here is that it is not that the whip is not being
cracked; it is being cracked and, in a few cases, even lashed. This is,
perhaps, for the first time since independence that the high and mighty of the
Indian industry are being made to cough up their dues to the public.
*Photo from internet
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