Aiyar Questions Waiver of Rs 1 Lakh crore Bad Loans - The New Indian Express

Aiyar Questions Waiver of Rs 1 Lakh crore Bad Loans

Published: 07th December 2013 07:52 AM

Last Updated: 07th December 2013 07:52 AM

In what could be construed as a direct attack on Union Finance Minister P Chidambaram, senior Congress leader and former Union minister Mani Shankar Aiyar questioned the economic policies of the UPA government and hit out at nationalised banks for writing off Rs 1 lakh crore loans extended to industries.

Addressing a national symposium here on Friday, he said the banks, which waived bad loans off industries, would have swooped down on the defaulter like an eagle, had it been an ordinary man or woman who could not repay 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 Aiyar, adding that the Finance Minister had a lot to explain in Parliament.  Aiyar’s remarks come in the wake of Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty stating that banks had written off a whopping Rs 1 lakh crore in the last 13 years.

He said the government called this a stimulus to economy. This sort of stimulus is good for the economy, but is providing subsidies to the poor bad for the economy? he wondered.

Aiyar 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 modernisation of the Delhi airport that caters to only the rich.

The former Union Minister said that ever since the new economic policies came into being, the Congress, which followed the concept of socialism, considered socialism as an anathema for the past two decades.

But the new economic policies did not usher in prosperity, and the growth rate was even less than what it was during the last last decade of socialism (5.6 percent). “We have moved out of a Hindu rate of growth to a Sikh rate of growth to be confined to a 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 2 lakh crore which is an increase by 25 times. But the irony is that we are ranked 135th in the United Nations Development Index. In 1992-93, we were ranked 138th,” he said.

He said that the country had failed to cherish the dreams of Mahatma Gandhi, who was for giving more powers to the panchayats. The beneficiary of the country’s growth is the Swiss bank, he remarked.

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