Congress and its President Rahul Gandhi are often seen constantly deploying rhetoric that the government is pro-rich and indifferent towards the needs of the poor. But the two emerging numbers have conclusively made this frivolous argument ineffectual. These two numbers put together, one about the government subsidies and another related to Insolvency Bankruptcy Code, tell one story. Under the Modi Government rich corporate houses are becoming more accountable and through the systematic implementation of Aadhaar it has also been ensured that the poor get their dues without the hassles posed by middlemen.
As quoted by the Union Finance Minister, Arun Jaitley, the total amount of subsidy transferred through Aadhaar stands at Rs 1,69,868 crores. In another article written by the Minister, which was shared by the official website of Insolvency and Bankruptcy Board of India, the amount creditors have realized through 4,452 cases disposed at pre-admission stage stands at Rs 2.02 lakh crores. Another Rs 70,000 crore is expected to be added soon as some big cases are in the advanced stage of resolution.
Changing the Lives of Poor by Rightful Targeting of Government Subsidies
In our recent article, Direct Benefit Transfer – Plugging the Leakages we have explained in detail, how in various flagship programmes the benefit is reaching to common man without any middlemen. Both DBT and Aadhaar existed in the previous administration as well, but the systematic application of these mechanism to the advantage of common people took shape under the present government only.
As explained in our article, Aadhaar: From Niradhar to Janta Ka Aadhaar, under the UPA Government Aadhaar was actually just another identity card. Modi Government brought the Aadhaar Act to give Aadhaar a strong legal basis and created JAM (Jan Dhan – Aadhaar – Mobile) which made the rightful reach of government subsidies more effective. Aadhaar helped save more than Rs 90,000 crores by removing duplicates and fakes.
What used to happen before these steps were put in place is to anybody’s guess. In fact, we have former Prime Minister Rajiv Gandhi’s admission in 1985 where he said that of every rupee spent by the government, only 15 paise reach the intended beneficiary. The situation was apparently same when the UPA Government was in power as the Planning Commission’s Deputy Chairman, Montek Singh, in 2009 had reiterated that a Plan panel study on PDS found that only 16 paise out of a rupee was reaching the targeted poor.
Making the Rich Accountable - Insolvency Bankruptcy Code and Beyond
Just as in the case of government subsidies, the scene was chaotic with regard to corporate accountability. In fact, when one think about the UPA II, the period remind us about the phase of extreme corporate lobbying as the infamous Radia tapes episode tell us and the rules were adjusted to accommodate corporate interests which led to various scams, like 2G, Coalgate, CWG etc.,
It is evident that the problem of NPA (Non Performing Assets) is the creation of UPA regime as the loans were recklessly given to the big corporates. The total amount loaned by the Banking Sector was Rs 18 lakh crores in the first 60 years after independence whereas, under the UPA Government (2008-2014), the total disbursement stood at Rs 52 lakh crores in just 8 years. Indiscriminate lending to crony capitalists led to the creation of huge issue of Non Performing Assets.
Now, the Insolvency and Bankruptcy Code (IBC) and the Law on Fugitive Economic Offenders and many other measures collectively have increased the accountability of big corporates and rich people. We have explained how the IBC is forcing some of the big corporates to pay their dues who otherwise were dependent on their clout to remain defiant.
- So far, 1,322 cases have been admitted by NCLT (National Company Law Tribunal). 4,452 cases have been disposed at preadmission stage and 66 have been resolved after adjudication. 260 cases have been ordered for liquidation.
- In 66 resolution cases, realization by creditors was around Rs 80,000 crores. In 4,452 cases disposed at pre-admission stage, the amount settled was around Rs 2.02 lakh crores.
- Vijay Mallya has been declared as fugitive economic offender. There is an initial success in securing his extradition.
- There has been a severe crackdown against another alleged fraudster Nirav Modi by law enforcing agencies.
As far as Rahul Gandhi making allegation on government benefitting a particular businessman is concerned, the specific charges have been rebutted in our article, “Rs 30,000 Crore in Ambani’s Pocket”- One Among Many lies by Rahul Gandhi on Rafale. His rhetoric is further checked in our article, Debt, Recovery and ‘Suit-Boot’ Rhetoric – The Facts Are Here.
The two numbers related to government subsidies and Insolvency Bankruptcy Code conclusively defeat the false narrative that the government is forgetting the poor and acting in the interest of the rich.