Misplaced Compassion

The tion is bound to be utterly shocked at the Union government’s decision to write off huge debts totalling Rs 7,016 crores taken as loan from the State Bank of India (SBI) by 63 individuals and companies. According to Daily News and Alysis (D), the beneficiary of the Rs 1,201 crore write-off (out of the SBI’s total write-off amount of Rs 7,016 crore) is Kingfisher Airlines owned by Vijay Mallya who has huge debts to several banks. Kingfisher Airlines alone has debts to 17 different banks totalling Rs 6,963 crore. There are other companies like KS Oil, Surya Pharmaceuticals, GET Power and SAI Info that owe the State Bank of India hundreds of crores of rupees. Knowledgeable fincial circles are convinced that the failure to repay these loans stems from a deliberate attempt to default on borrowings. Even so, the SBI has decided to write-off the loan accounts of 63 companies completely, 31 companies partially and to show six accounts as non-performing assets in the bank’s books. At a time when the tion has come out in full support of the Prime Minister’s bold demonetization initiative despite considerable hardships, it is indeed unfortute that there should have been this act of totally misplaced compassion towards people like Vijay Mallya and other irresponsible industrialists who have knowingly sought to defraud the SBI and other banks. It will now be said that undue consideration has been shown to Vijay Mallya because he happened to be a former MP, despite the fact that Kingfisher Airlines was in debt to 17 different banks to the tune of Rs 6,963 crore. This act of misplaced economic compassion is likely to be seen as an act of deplorable fiscal indiscipline at a time when people are being asked to wage a war on black money.