Expectations were raised that the second part of the budget session will be productive. The Finance Minister said that he is bringing the Bankruptcy Law and he will also try to get the GST bill passed. However, political developments always create a new situation and it has happened again. Unless the Congress cooperates or unless of course they can muster up all the other parties and carry on without Congress, Rajya Sabha will be difficult a house for the BJP to get anything approved. Of course that cannot be done in the GST (Goods and Services Tax Bill), but Bankruptcy Bill and others if they take on board other parties they may succeed.
The main point is that Dr. Subramanian Swami who has been nominated to Rajya Sabha now has raised the issue of Westend Helicopter Deal. This matter had come some time ago and some discussions were taking place in press. The new situation is that an Italian court apparently has said that there has been corruption in this deal and has named some people which we don’t know. Even in the Bofors case in 1989, a similar situation had arisen. It was some Swedish radio which first broadcast that deal and that’s how it came to light that there were negotiations and lots of things had happened behind the screen. Economic offenses and their investigation have their own mechanism, to say that this can easily achieve just because an Italian court has said is simplifying the situation. Indian procedures are Indian procedures, Indian courts are Indian courts. Yes, politically you can get advantage and you can tarnish the image of Sonia Gandhi and the Congress party, which is probably what Dr. Swami seeks to do.
Similarly, there is the Panama papers leak which includes lots of prominent people, some businessmen, some actors, and some other prominent people. Now really we have reached too far, because Panama is a place which has secrecy in forming companies; all that has come from there is the name of the person and the company. How much money is there? Where is the bank account? How that money has gone? It is a long-long investigation, but in the present atmosphere of witch-hunting, it is all game. As far as the government is concerned what they should really do is to bring the whole focus back. If the government is interested in getting money from abroad into India, first they should examine whether it worth it. If the numbers suggested in the press, if really is so much money of Indians that would in the interest of the country if that money comes in. Money must be already in India through Mauritius and other channels, so whether you want to do it. Of course it is not easy. Doing it legally or coercive method is not possible. If you really want that money you must create conditions in which people really bring their money back and that businessman knows only if it is more beneficial here they will bring it back. So you have to give incentive. That should be debated and carefully examined whether that is a fair thing to do and whether wrong doers are being pampered.
Similarly, NPA. NPA means nonperforming assets – company is not being able to serving the interests to the banks. That does not mean that money is gone. It does not mean that the bank has lost the money. Each case is different banks must examine, whether they can take over the management, whether they should give a haircut (meaning race to promoter who can give the money back). Or in the case of Vijay Mallya the banks very well know that planes were not his they were on rent. There is nothing that banks can really grab, except some personal guarantees. The way he has been treated is a sad story. You cannot expect foreign direct investment to come in this country, if you create such uncertain atmosphere for your own people who have been running industry and in case of Dr. Mallya he is also a member of parliament. So I think the government has to have a whole relook at the whole situation. So what is the best way to go about? The current situation is a pick and choose which western people do not like, they like rule of law applicable to everybody.
According to newspaper reports Dr. Mallya owes the banks Rs. 9,000 odd crores as NPA, but there are others who owes rupees 17 to 30 thousand crores as loan. Either you start from the top or you start from the bottom. Here what is happening you are picking and choosing for reasons best known to the government? Dr. Mallya may have fallen to the foul side of the government, and therefore he is getting into the net like Subrato Roy, which is a strange case. Even UPA government put him in jail; NDA government did nothing to take him out of jail. The Supreme Court says no, no, he is not convicted he is in our custody. I do not think these are the correct methods, however leftists or even a socialist like me may right that public sector is better option, then why did you allow this industry to become so big lent all the public money and now you do not known how to take that back, not an intelligent thing to do. I must say UPA under Mr. Chidambram did follow certain norms not cracking the whip on these kinds of cases, but if this government thinks in its wisdom that cracking the whip by creating a scare, by threatening people that unless you disclose you will get harsh penalty.
In India everybody knows income tax people have been avoiding and awaiting for years, what has happened? Nothing! The system is quite loose. So threatening on the basis of that system, Indian businessmen don’t take it seriously. It is a matter which needs examination by the economic affairs committee of the cabinet. The Prime Minister should call meeting with the finance minister with other concern minister and maybe people in the knowhow of the subject Dr. Ranagarajan former RBI governor, present RBI Governor, Dr. Arvind Subramanian people who know the subject. The question is since they are following the American pattern of liberalization, fiscal deficit, etc. etc. The question should be ask in this meeting is how would America have tackled it, that is the only way you can tackle it, there is no other way. Incidentally the bank collapse in 2008 American government put in money which called nationalization but they put in money to save the bank, whether it is right or wrong it is different matter, but this is only practical way out.
Today they should call a meeting of senior bankers whose money is really involved, and bankers are very clever they know everything they know how this money will come or not come. SARFAESI is an act empower banks to take over assets without any legal proceeding. Why do not you use it? Obviously you cannot use it because there are no assets which can recover the money. Then what happen. You have to write down the money. You can legally proceed, humiliate the person, embarrass the person, all that, but we talking about money we not talking about zillat (humiliation) which easy to do. Earlier Finance Minister addresses the problem better it is.