from PSU banks, then re-capitalise those banks with public wealth ! That is economic reform for you !
According to a report by Credit Suisse published in October 2015, the total amount of money owed to the state-owned banks alone was calculated to be Rs 3.04 lakh crores. Here is a simple explanation of how the scam works as explained in the Global War on Cash series published by anti corruption watch dog skepticindians.
Most of these loans are classified in banking books as Non-Performing Assets (NPAs). In simple terms, an asset is tagged as non-performing when it ceases to generate income for the lender, meaning these loans became unrecoverable bad loans. But wait, when the companies themselves are making good profits, how could their loans be termed NPAs?
According to the Comptroller and Auditor General (CAG) of India Shashi Kant Sharma, a significant part of NPAs amount to fraudulently obtained advances and a large part of these loans may now be irretrievable as they are likely to have been transferred abroad. He also said that in recent times, there have been frauds against institutions, frauds committed against banks, especially public sector banks that are struggling. NPAs do not just reflect badly in a banks account books; they adversely impact the national economy.
So what has the Government been doing about this? Well, simply writing it off the books! Government has been writing off such corporate debts in lakhs of crores of rupees under what is called revenue forgone now known by a new fancy name ^revenue impact of tax incentives^. Data presented by Santosh Kumar Gangwar in a question answered in the Rajya Sabha on 2nd August 2016 show the extent of such revenue foregone in 2015-16 and this is estimated to be Rs 6.11 lakh crores.
According to the Revenue Forgone Statement, corporate companies on an average get tax waiver of Rs 7 crores every hour or Rs 168 crores every day or Rs 5.32 lakh crores every year. It is close to three times the amount said to have been lost in the 2G scam and about four times what the oil marketing companies claim to have lost in so-called under-recoveries in 2012-13. In the nine years from 2005-06 to 2013-14, corporate tax waivers plus write offs amounted to Rs 36.5 lakh crores. That, in case you like the sound of the word, is Rs 36.5 trillion. This is how the richest 1% of Indians get to own 58.4% of the countrys wealth!
Re: Help thieves steal lakhs of crores of rupees
by piri on Oct 26, 2017 09:31 PM
The report goes on to name the 10 companies whose written off loans (taken from Indian public sector banks and written off by the Modi govt) are the highest.
They include the usual suspects - and they are indeed proven over and over again to be the biggest thieves independent India has known !
They are the Anil Ambani group (whose loans adding upto Rs 1.25 lakh crores were written off), the Ruias (Rs 1.01 lakh crores), the Adani group (Rs 96000 crores), the Anil Agarwal group (Rs 91000 crores) and others.
So far, the CAG and the RBI have flagged the seriousness of this gigantic loot of public wealth by croxny capitalists. Sections of the media have been highlighting the pillage time and again.
What the Congress started as a trickle under Indira Gandhi long ago, subsequent governments that swore by the ^reforms^ model of economic growth have helped in converting into a stream, then a torrent and finally a mighty crashing river of corruption under Narendra Modi !
The Industrialists who could not avail the earlier opportunity of not taking loans and running away, will use this second opportunity to siphon as much money as possible and will cheat the banks, resulting in the NPAs to go to higher levels. The bank managers are happy as they will get good commissions on giving loans to unscrupulous elements. This is a wrong move of the govt using the tax payers money for recapitalisation. The defaulters assets should be confiscated and sold to settle their dues before recapitalisation.
Re: ANOTHER OPPORTUNITY
by Hardeep Gill on Oct 26, 2017 10:26 AM
Fully agree with the comments . It is a try to make more richer .it is second round of the race where best loser will be given to make money.People should stop paying tax, then see how banks can be refunded . these business man looting the country from all angle .
The basic root cause of current banking rut is irresponsible lending during previous regime by employees with safety nets and unscrupulous politicians.Now along with stimulus government says it will privatise those banks which improve balance sheets. This will garantee unhealthy balance sheets as no employee with job security wants to go into world of competition and uncertainities. Actually what this bank problem needed was a sharp Surgical Strike to get rid of these elements. Instead poor Joe is being burdened.
Re: The root cause remains
by Gladyschellam on Oct 26, 2017 11:46 AM
Since nationalisation all PSU banks were doing business well till 2015.No PSU banks have shown any loss or lesser profit. Average growth used to be between 14-17% in deposits and 13-15% in lending. Last year growth was between 3-4%. Till March 2015 Gross NPA percentage was between 1.5- 3% and Net NPA used to be between 0.75 to 2%. Percentage of NPA has gone up from March 2016 & 2017.
For the last 2 years Agri growth not good. Further manufacturing sector (IIP) and export sector were continuously negative. Even very big companies have shown lesser profit than the normal. Analyse the reason behind- which caused the increase in NPA. NPA means it is not recoverable - it does not earn interest depends on period of NPA.Once the accounts are regularised, provision made to particular accounts will be taken to income a/c. Once turnaround is made all banks could show profits.
Leaving PSU Banks, all private sector banks except one have shown more NPA - to be analysed whether it is due to poor lending or due to Indian economy.
2.11 lakh crore over two financial years, 2017-18 and 2018-19. Who pays for it?The poor Indian tax payer pays Rs 1623 per head when the top 0.1% Earners (of India )have got a higher share of 12% of the total growth than the bottom 50% who got 11%)during our market Economy days 1980-2914>It is looting the poor pauls of India to pay 0.1% Peters of india.If banks need finance the property of the those who failed to return money must be confiscated first .Why had the entire bang(k)dom and the previous Govt . not told the unrecovered loan amount year by year.By the 42nd Amendment in 1976 India is a socialistic democarcy meaning that wealth is organised to be generated socially by Govt.and should be shared equally by society.Government should regulate the ownership of land and industry to reduce socio-economic inequalities.This recpaitalization goes contrary to that is envisaged in the constitution.DOES INDIA CARE? HAS IT BECOME ARISTOCRACY R.PONNAMBALAM
