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Modi government acting tough on Indian corporates over repayment of loans
The Modi government has been alleged to be going soft on those who have taken massive loans and are not repaying them back. The allegations are not true. A review reveals that big ticket assets and projects have been put up for sale.

The Modi government is frequently accused of its close relations with the Indian corporates. It has been often alleged that the government has been working in their favour by exempting them from paying taxes amounting to thousands of crores of rupees. Rahul Gandhi is one prominent politician who frequently says that Modi cannot see poverty and the poor in India; all his attention is towards his rich friends in the corporate world.

As a matter of fact, these 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 to the banks. It may be recalled that the Indian banking system had accumulated hundreds and thousands of crores of rupees in loans that had become non-performing assets, primarily because the corporate sector has not paid back the huge amounts it had borrowed from various banks. These loans were taken during the Congress' rule which Modi on occasions had referred to as "phone banking" by politicians and senior bureaucrats.

As The Hindu reported, "for sale" tags are now visible on big ticket industries like, among others, airports, roads, ports, steel plants, refineries, cement units, etc. The Hindu reviewed the corporate houses that had taken billions of rupees in loans and came across results that were startling.

A snap-shot of the results of the efforts to recover the outstanding loans by the so-called "suited booted sarkar" is follows:

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 along with its flagship firm. It has also decided to sell from Reliance Infra 49% in electricity generation, transmission and distribution in Mumbai; the cement business to Birla Corp. It is also looking to sell its entire portfolio of road projects, 100% of it valued at around 9000 crore.

2. The two Ruia brothers of Essar Group have accumulated a debt of more than Rs 1lakh crore. Ruias have been notorious so far in being reluctant to pay back their loans. Now they are out to sell Essar's huge stake in its steel business and 49% of its oil to a Russian oil company. Essar Oil and Steel accounts for one-third of the Group's debt.

3. The JP Group's debt is over Rs 75,000 crore. The company is looking to sell off its cement plants and is contemplating to put up on sale its interests in the Yamuna Expressway, 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 11,000 crore in roads projects, South African coal mine, Istanbul Airport, a Singapore power project and 2 coal mines in Indonesia.

5. The Lanco Group has sold off its power plant in Udipi. The debts of the company have been rising from its current outstanding of Rs 47,000 crore. It is planning to sell more thermal power plants and its interests in an Australian coal mine to reduce its debts.

6. Tata is selling its Corus Steel in the UK, Dhamra Port, communications arm Neotel in South Africa and land in Mumbai.

9. Videocon is selling telcom spectrum in 6 circles and oil assets in Mozambique.

10. Renuka Sugars is selling its Brazil Power, Sugar and Bio-fuel business.

11. Sahara Group's 86 real estate assets are on sale along with 42% stake in Formula 1, Mumbai's Sahara Hotel, Governor's House Hotel London, New York Plaza Hotel, The Dream New York Hotel and 4 airplanes.

12. Nearly all of Vijay Mallya's assets are on sale.

Even Indian promoters are selling their assets to repay bank loans! DLF is selling its Saket mall and 40% of all its rental assets and land assets. Surprisingly, Jindal Steels is selling 49% of its rail business, 5% of its energy exchange and its 3,500 MW power plant.

Furthermore, GVKsold 33% of its Bangalore Airport stake as well as its controlling stake in Bombay Airport and its complete road assets.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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