National Banks writing off Rs one lakh crore bad loans to industries slammed

Aiyar says Chidambaram has lot to explain during winter session

 

Chennai:

In what could be a direct attack on the Union Finance Minister P Chidambaram, a senior congress leader and former Union Minister Mani Shankar Aiyar questioned the economic policies of UPA government and hit out at the national banks for writing off Rs one lakh crore loan extended to industries.

 

Addressing a national symposium here on Friday, he said the banks, which have waived off bad loans off industries, would have swooped like an eagle had the defaulter been an ordinary man or woman who could not pay the loan.

 

“But these are rich firms and the non performing assets were removed from the books to enable the companies that were not performing to perform,” said Aiyer adding that the Finance Minister has a lot to explain in the parliament.

 

Interestingly, this comes in the wake of Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty stating that banks have written off a whopping Rs 1 lakh crore in the last 13 years

 

He said the government calls this as stimulus to economy. Interestingly, this sort of stimulus is good for the economy but providing subsidies to the poor is bad for the economy, he wonedered.

 

Aiyer also hit out at the government policy to allow foreign banks operating in the country on nearly equal terms with Indian banks besides concentrating on infrastructure like modernizing of Delhi airport that caters to only the rich.

 

The former union minister said that since the new economic policies came into being, Congress which followed the concept of socialism, considered socialism as an anathema for the last two decades.

 

But the new economic policies did not usher in the prosperity and the growth rate is even less than what it was during the last last decade of socialism (5.6 pc).

 

“We have moved out of a Hindu rate of growth to a sikh rate of growth to be confined to sick rate of growth,” he said. He also said the growth nearly 10 per cent in 2008-09 was due to hedge funds and once the US economy burst our growth was hit but at a slow pace, he said.

 

The former minister also said that the country spent rs 7,600 crore in 1992-93 to alleviate poverty. “Now we are spending Rs two lakh crore which is an increase by 25 times. But the irony is that we are l ranked 135, in the United Nations Development Index. In 1992-93, we were ranked 138,” he said.

 

He also said that the country has failed to adhere to the dreams of Mahatma Gandhi, who was for giving more powers to the panchayats. He also said the beneficiary of country’s growth is the Swiss bank.