Prashant Bhushan: Crony capitalists may run away with all the banks’ money

Privatisation of PSBs is not at all the solution to NPAs. We have to understand that PSBs fulfil a vital social need. India has a number of people who need access to finance, says the lawyer-activist

Getty images
Getty images

Bhasha Singh

Senior advocate and leader of Swaraj India Prashant Bhushan is known for his forthright speech and compelling arguments. He has been running a campaign against crony capitalism, which has engulfed the country due to rampant political patronage. The objective of his campaign is to make organisations and companies accountable to people. He believes that the Modi government at the Centre has broken all records when it comes to scams. Not only democracy but India’s civilisational ethos are at risk from this government, he avers. He speaks to National Herald on various burning issues facing the country:

Q. It is being alleged by many people that the Modi government has promoted crony capitalism. How, according to you, has this impacted Indian democracy and democratic structures?

A: Democracy and democratic institutions are at grave risk all over the country. It is not that democratic values were not disregarded earlier. Voices of dissent were suppressed earlier as well, but whatever is happening in the present regime is unimaginable. Theft and corruption is going on unashamedly and with arrogance. I am now fearing that these crony capitalists may run away with all the banks’ money before the 2019 general elections!

Not that the industrialists did not go on foreign trips with the previous Prime Ministers. Dr Manmohan Singh also took delegations of industrialists along with him on foreign visits. But their names were not concealed. Their names were put up on the PMO website. it’s another matter whether the agreements that took place were wrong or right. But due processes according to laid down rules, regulations and constitutional traditions used to be followed. The wrong agreements were openly challenged, many scams took place but the situation was not so grim. The present government has thrown all rules and regulations and even the Constitution to the wind and is making a mockery of rule of law. I want to say with due emphasis that today democracy and civilisational values are in danger. It is crystal clear that the Modi government is encouraging cronyism.

Q: The forces of hatred are becoming very powerful. The culprits don’t seem to be getting punished, no matter whether it is an economic offence or otherwise. Is there some drawback in our basic structure?

A: Diversity is our strength. In a historical perspective, we choose secularism as this is the basic ethos of our nation. Now the country is run by the BJP-RSS and their propaganda. Politics of hate and divide is ruling. There is nobody who can challenge it. All the pillars of democracy seem to be futile before them. They are indulging in so many scams but there is no remorse on their faces. Why? Because they know that now they have established themselves firmly in power and they have brought the system under their control. During Emergency, our democracy was put at risk but in Modi’s tenure, democracy itself is being demolished. The country is being turned into a mobocracy, a ‘lynchistan’. Dalits and Muslims are being assaulted gruesomely but the entire system is remaining a silent witness to all this. The culprits are left scot free in every incident of violence. Cases are being filed on the families of the victims and deceased instead.

Q: Scam after scam is coming to the fore but the Prime Minister is silent. Why?

A: That is the arrogance of power. The Prime Minister is ready to speak and tweet on anything which is happening around the world. But when it comes to India and Indians, he is very selective, very choosy in his responses. Basically, at their core, the BJP and the RSS don’t have any faith in democracy. Now the irony is that they have the power. All these scams are directly or indirectly connected to the top brass of the government. Who went to France and announced the Rafale deal to be re-done? Who decided on the price and the number of aircraft? In PNB, there are obvious political links and pressures which were operating in favour of Nirav Modi. How come he came to Davos after the scam was unearthed and got the photo op and the privilege of meeting the Prime Minister of India? So, this is the difference from the previous regime. We all should understand this. This is unprecedented.

Q: Public sector banks seem to be under huge stress…

A: Basically, banks, and especially Public Sector Banks (PSBs), are being used as tools to bail out favoured corporates. My point is, already we have given them so much. But why are the PSBs now forced to give new loans to dubious people and groups? Those who should be given loans are not being given. Many roll-overs are taking place. Through corporate debt re-structuring, they are being exempted from their accountability.

As far as Nirav Modi is concerned, he received favours majorly after 2014. Many scams are coming to the fore though it is only the tip of the iceberg. But we can easily feel that the system is getting rotten. The Bank of Baroda scam of more than Rs 6,000 crore has also happened now. And had they given Rs 6,000 crore to Adani, which finally did not happen because there was so much hungama about it, that could also have become an NPA for the bank.

Q: Why are these scams not changing the political discourse of the country?

A: Many huge scams are taking place. The government is trying its best that these things and activities remain under wraps till the completion of their first term and they want to make sure they do not surface in future as well. It is good that some cases are being exposed. In these four to five cases too they are trying to defend themselves and hit back. They are trying to blame the Congress in every case but are not succeeding.

Q: What are the major changes which have taken place at the government level?

A: Transparency has completely vanished. Earlier, you got to know everything about where the PM is going, who all are accompanying him. Now it is only a one-man show. No other minister is influential or powerful. All defence deals are done without the knowledge of the Defence Minister. All foreign trips, deals, negotiations are done without the knowledge of the Foreign Minister. It was never like this in our country.

Second major change is that earlier, in the UPA regime, RBI Governors were credible people. They had some stature, command and say. No credibility is now attached to this post. See the irony. The RBI Governor was told about demonetisation just two hours before the announcement. He did not utter a single word in opposition. The previous Governor had strongly opposed it. In the same manner, the Supreme Court had given its judgment two years ago that the government and RBI will have to disclose all the information about how many scams took place, how many NPAs occurred, how many big borrowers and CDR are there, etc. I myself had argued this case. This included all the information regarding how much loan a bank has given, and who has taken how much loan, etc. With this, the state of banks and RBI could be assessed. In this case, there were 10 different petitions for gaining information from RBI. I had clubbed them together and argued the case. But this government has disregarded such a clear verdict of the Supreme Court. The government has not given any information till now. Similarly, the Lok Pal Act is four years old. The Supreme Court had also given a verdict on this a year ago. Even then, the government has appointed a Lokpal. They have become stubborn and arrogant. This was not so in UPA’s regime. Scams have taken place during every regime but such dishonesty and unscrupulousness is unprecedented. Theft and arrogance — besides the art of spreading lies — all these make the Modi phase in Indian politics peculiar and unparalleled. Now, Union ministers are spreading the lie that Nirav Modi conducted all the fraudulent activities during the UPA’s rule while all it happened right under their nose.

Q: But even then, whether it is the Modi government at the Centre or the BJP governments in the states, they are propagating that theirs are the most honest governments…

A: Their mechanism of spreading propaganda is strong. They are in power only due to this mechanism. Scams have taken place one after another in the Centre and BJP-ruled states and are still happening. From Vyapam to PDS to the mining scam in Goa, you can see scams every¬where. But they are somehow not at the centre of our political discourse.

Q: Who, do you think, is responsible for the mounting problem of NPAs?

A: Our policy makers don’t want to resolve this but the problem is now getting out of control. The modus operandi in many of these cases were very similar and everyone knows how these scams are being conducted. The money was siphoned off through over-invoicing by intermediary companies set up outside India which would then remit the money to another fully owned company in a tax haven. Then they will run away with full knowledge and support of the system as it has happened in the Nirav Modi case. They are allowed to loot the country’s wealth, rob Indian banks and thus make the whole system and the economy collapse.

Q: How can this collapse be checked?

A: There is an urgent need for greater transparency in the loan appraisal process when a corporation approaches public sector banks for funds. An independent credit appraisal authority should be immediately set up, which will conduct the appraisal of every loan proposal from top corporates. This would ensure that forum shopping, being done by corporates (moving from one public sector bank to another in search of loans), would come to an end. Privatisation of banks is an extremely dangerous idea. All these private companies, big corporates are looting India’s money. Privatisation of public sector banks is not at all the solution to the problem of NPAs. We have to understand this fact that public sector banks fulfil a vital social need. India has a large number of poor people who need access to finance. We should not allow the government to give up its accountability towards the Indian poor. Farmers and depressed sections need soft loans which private sector banks are never going to give.

Follow us on: Facebook, Twitter, Google News, Instagram 

Join our official telegram channel (@nationalherald) and stay updated with the latest headlines