PM blames Cong for bad loan mess

Every penny will be recovered: PM

PM Modi on Saturday launched a blistering attack on the Congress for leaving the economy on a 'landmine' by its indiscriminate lending, saying loans were handed out to select businessmen after phone calls were made by 'namdars' (dynasts). He blamed 'phone-a-loan' scam of the previous UPA regime where money was lent by banks to select rich businessmen close to a particular family for mounting non-performing assets (NPA) or bad loans but vowed to recover every penny from defaulters.

None of the 12 biggest defaulters, who between them account for over Rs 1.75 lakh crore of NPAs, were given loan by the present government, Modi said at the launch of payments bank of the Indian postal department. He said while the previous UPA government hid the bad loans, his government has properly recognised them and brought tough laws to deal with defaults and recovery money. The PM said the country was cheated when the last government put such loan amount at Rs 2-2.5 lakh crore when it actually was Rs 9 lakh crore. This comes days after Congress President Rahul Gandhi's attack on the government for NPAs jumping to Rs 12.5 lakh crore under the BJP rule from Rs 2.5 lakh crore under the previous UPA regime.

Modi said when his government came to power in 2014 it noticed that publicsector banks had been plundered. Loans of banks jumped to Rs 52 lakh crore from 2008 to 2014 from just Rs 18 lakh crore in the previous six decades. Loans were given

without any due diligence and keeping aside all rules and norms, he said, adding defaulters were given further funds in the name of loan restructuring. "How were these loans given? One phone call from the namdars would get the rich loans," he said alleging a 'phone-aloan' scam under the UPA government. "This phone banking of Congress and its namdars caused a lot of damage to the country," he said, adding banks obliged namdars because top executives were appointed by the same namdars. "Despite knowing that the loans would not be returned, banks lent money." And when these borrowers started defaulting, pressure was mounted on banks to give more time and then restructure these loans by giving more funds. "In 2014, after our government was formed we realised that the Congress and namdaars had put India's economy on a landmine," he said.

The economy would have been damaged by the explosion of that landmine but the government worked not just to detect the ailment but also took steps to uproot the disease, he said. Modi said his government has "defused" the landmine placed by the government of namdars and its results have been witnessed in the 8.2 per cent GDP growth clocked in the first quarter of the current fiscal. "This growth is proof of growing strength of the Indian economy and that the country is moving in the right direction," he said.