BJP led NDA government has written off around 8 lakhs to be bad loans. It is much higher than the previous Congress-led UPA government 10-year rule where the number of bad loans was around 2,20,328 and in BJP’s term, the amount of bad loans has almost tripled. The exact estimate of bad loans is estimated to be around 7,94,354 crores between 2015-2019.
Bad loans are created when the debtors do not have enough assets to pay back the loans they have taken from the banks, so it becomes a liability on the part of the banks which they are forced to write off to create a balance.
The RTI query which revealed this info was filed by Prafful Sarda, a Pune based businessman. This write-off has affected two dozen public sector banks, 3 dozen private sector banks and almost 4 dozen foreign banks. The most shocking is the number of bad loans with the foreign banks, which have increased by a large margin over any of the previous governments.
The opposition party Congress has demanded public declaration of borrowers whose loans have been written off by the central government. They want the names of all such debtors whose loans have been waived off in the party’s regime. They have questioned the government why such loan defaulters’ bad loans are being waived off while there is no relief for farmers’ loans. Congress has accused BJP of helping their industrialist and capitalist friends by waiving their bad loans.
Earlier, in 2016 – Delhi CM, Arvind Kejriwal has also said that the demonetization move carried out by Modi government is a way to waive off bad loans of his corporate alliances.
The high amount of bad loans are also the result of debtors and loan defaulter who flee the country when they are not able to pay back. They include the likes of Vijay Mallya, Nirav Modi and many other big corporate houses.
Although there is a recovery of 82,571, almost 12% of the total bad loans, but the amount of bad loan write-offs is still shocking to the general public.
The only solution to curb the growth of such bad loans is auditing each party’s cash flow and donations. It will give the parties and the government accountable to the general public.
The COVID-19 pandemic has already delayed the economic growth of the country, this may affect the country even harshly.