Explained Featured National

Modi Government Tightening the Noose on Defaulters

Modi Government

In this world of information overload, it is difficult to bring out the information that matters. Even more difficult is to build a pattern from that information and give the correct perspective

India has seen a lot of debate around Vijay Mallya and Nirav Modi, about how they conned the Indian establishment and escaped from India. The government was held responsible for their “escape” even when the government was doing its level best to extradite them back to India.

In this entire rhetoric, we almost forgot the other news. Mallya and Nirav Modi aren’t the only defaulters and certainly not the largest. Genuine businesses can go bust. But the Narendra Modi led government has been acting tough on those defaulters who have allegations of money laundering. The money taken from banks is laundered to benefit the promoters/owners and their friends.

One such case is the Dewan Housing Finance Ltd (DHFL). Enforcement Directorate arrested its promoter Kapil Wadhwan. ED is probing the links of DHFL promoter Kapil Wadhwan in funding the activities of gangster Iqbal Mirchi. ED probe reveals that DHFL has siphoned off Rs 12,700 crore through 79 fictitious accounts to benefit the companies associated with the promoter Wadhawan.

In another news, Jet Airways chairman Naresh Goyal was arrested at the airport itself, with allegations that he was trying to flee India. Jet Airways has been grounded as it defaulted on roughly Rs 11000 crore debt. ED is probing the allegation of siphoning of Jet funds by Naresh Goyal.

Putting Things into Perspective

What ED said about DHFL and Jet Airways is just information. What matters is the perspective.

Vijay Mallya is a defaulter. Combining his principle amount and interest, he owes the Indian banks about Rs 9000 crores.

Nirav Modi utilized the Letter of Undertaking to renew export credit through the Punjab National Bank. He owes Rs 11,400 crore to the PNB.

Both are fugitives who escaped India to avoid prosecution. The government and agencies were blamed for it.

However, very few noticed that even bigger defaulters are under arrest and being probed. DHFL promoter Wadhwan siphoned off Rs 12,700 crore while Goyal is accused of money laundering that landed Jet Airways in a debt of Rs 11000 and more. Both these cases are much bigger than Mallya and Nirav Modi. But they got very little attention.

It should also be noted that the government passed the Fugitive Economic Offenders Act in 2019 that details the process to declare a defaulter as a fugitive economic offender.

Modi government is plugging all loopholes to ensure we don’t have a repeat of Mallya or Nirav. That’s why Wadhawan and Goyal are in jail and the process of recovering your money is underway.