Sep 24, 2023
Sep 24, 2023
From my scrapbook: 9
The Modi government is frequently accused of its close relations with the Indian corporates. it is alleged to be not only is soft towards them, it also works in favour of them by exempting them from paying taxes amounting to thousands of crores. Rahul Gandhi is one prominent politician who frequently says that Modi cannot see poverty and the poor in India; all his attention is always towards his rich friends in the corporate world.
In point of fact, the allegations do not seem to be correct as it was recently reported that the Indian corporates are selling off their massive assets in order to pay back the loans that had remained unpaid till now. It may be recalled that the Indian banking system has accumulated hundreds and thousands of crores of loans that have become its non-performing assets, primarily because the corporate sector has not paid back the huge amounts it had taken from various banks. These loans were taken during the Congress rule which Modi had occasion to refer to as “phone banking” by politicians and senior bureaucrats.
As The Hindu put it, “for sale” tags are now visible on big ticket industries like, among others, airports, roads, ports, steel and thermal plants, refineries, cement units. etc. The Hindu reviewed the corporate houses that had taken billions in loans and came across results that were startling,
A snapshot of the review is given below:
1. Anil Ambani’s Reliance Group is sitting on a pile of loan of Rs. 1,20,000 crore. The assets put out on sale are transmission towers, optical fibre related infrastructure from Reliance Communications, its flagship firm. It has also decided to sell from Reliance Infra 49% in Electricity generation, transmission and distribution in Mumbai and its
Cement business to Birla. It is also looking to sell its entire portfolio of road projects valued at around Rs. 9000 crore.
2. The two Ruia brothers of Essar Group have accumulated a debt of more than Rs.1lakh crore. Ruias have been notorious for their reluctance to pay back their loans. Now they are out to sell Essar’s huge stake in its steel business and 49% of its stakes in oil to a Russian oil company. Essar Oil and Essar Steel account for one-third of the Group’s debt.
3. The JP Group’s debt is over Rs. 75000 crore. The company is looking to sell its cement plants and is contemplating to put out on sale its interests in the Yamuna Express Highway, thermal power plants besides its land parcels. The company seems to have gone broke.
4. GMR was reported to be the first among the debtors to sell off assets to pay back its hefty outstanding loans. It has already offloaded its stakes worth Rs.11000 crores in road projects, South African coal mine, Istanbul Airport, a Singapore Power Project and 2 Coal Mines in Indonesia..
5. The Lanco Group has sold its power plant in Udipi. The debts of the company have been rising from its current outstanding of Rs. 47000 crore. It is planning to sell more thermal power plants and its interests in an Australian coal mine to reduce its debt burden.
6. The Videocon Group is aiming to reduce its debt to Rs. 29000crore from the current figure of more than Rs. 45000 crore. It has already sold its spectrum rights to Bharti Airtel for Rs.4600 crores and is selling its stake in Mozambique gas fields for Rs. 15000 crore.
7. Jindal Steels is selling 49% of its business of supplying rails to the railways of various countries. Only 50% of the capacity of his Raigarh plant is being currently utilized. Naveen Jindal is also selling 1000 MW power plant to his brother. He is also contemplating to sell his other assets to reduce his debts of Rs. 46000 crore.
8. The Sahara Group is in real trouble. Its chief had even to go to jail for not meeting the obligations its firms had bargained for. Its sell-list now contains as many as 86 real estate assets, a 42% stake in Formula One team Force India, Grosvenor House, London, the New York Plaza Hotel, the Dream New York Hotel and Sahara Hotel in Mumbai. It is also selling it four airplanes.
9. By now everyone knows that nearly all of Vijay Mallya's Assets are up for Sale. The loans obtained by exercising political influence are now being recovered by the method of attachment of his several high value properties and assets.
More by : Proloy Bagchi