NEW DELHI: Why are the Prime Minister and the finance minister selling family silver by asking public sector LIC to bail out private company IL&FS, the Congress asked on Saturday while taking a dig at the Centre’s economic policies.
Congress spokesperson Gaurav Vallabh said: “In the last four and a half years, the Modi government has systematically demolished the foundations of the banking and financial services sector of the country.’’
He cited over 400 per cent increase in NPAs of banks, a dozen bank fraud cases involving more than Rs 1 lakh crore, eroding the small savings of the common people to support his charge, and pointed out how the government was going to sell the family silver of 38 crore LIC policy holders to bail out loss-making banks and financial institutions.
“The latest is the bailing out of Infrastructure Leasing & Financial Services Limited (IL&FS), which is 60 per cent privately owned. Out of this 36 per cent is owned by foreign entities and 39.43 per cent is owned by public banks and the Life Insurance Corporation of India,” said Vallabh.
Vallabh said that IL&FS was saddled with a long-term debt of over Rs 91,000 crore due to public and private sector banks. The total debt of IL&FS increased by a whopping Rs 42,420 crore in just four years of the Modi government, indicating an increase of debt at the rate of Rs 900 crore per month.
“If we add long-term and short-term debt, it is more than Rs 1,20,000 crore,” said Vallabh, adding that “By forcing LIC and SBI to inject Rs 7,500 crore in IL&FS, the government is only providing a ‘band-aid’ to a problem that requires surgery.”