Gadkari says Mallya is not ‘willful defaulter’, blames banking system, RBI

Even though the Indian government aggressively pursued and celebrated the extradition of Vijay Mallya from the UK, senior Union Minister Nitin Gadkari has a different view of the situation. He has come to the rescue of Mallya saying that “it is unfair to dub the businessman as a fraud or a willful defaulter for committing. He also said that “there are risks in the business, be it banking or insurance, there are ups and downs. But, if the mistakes are bona fide, forgive him and give him another chance,” he said.

He made these comments while attending an event on Wednesday, December 13, where he also made a startling comment that if the mistakes are bonafide then one-time defaulter Mallya must be forgiven and must have a chance to alter his mistakes
These comments may not go down well tin the corporate world, banks and even his own party members in the BJP government, one-time loan default and hurdles that he faced in the airline industry.

However the Minister did not stop here he made more shocking comments, saying “Long back Maharashtra government had given a loan to Vijay Mallya through the state PSU Sicom, and he used to repay the interest diligently for 40 years. But after entering aviation, Mallya started facing problems and could not repay loans. If a person who was repaying the debt for 40 years, and due to some issues he is not able to meet his debt obligations later, can you declare him a wilful defaulter? If Nirav Modi or Vijay Mallya have committed fraud then send them to jail, but if we label everyone who is in financial trouble as fraudsters, then the economy will not progress.”

“40 saal Mallya regular payment kar raha tha, byaaj bhar raha tha...40 saal baad jab wo aviation mein gaya....uske baad wo adchan mein aaya to wo ekdum chor ho gaya?...jo pachaas saal byaaj bharta hai wo theek hai, par ek baar wo default ho gaya...to turant fraud ho gaya? Ye mansikta theek nahi hai!

(For 40 years Mallya made regular payments, and paid his loans, by mistake if he entered the Aviation industry, he was caught in a hurdle so is he a thief? Someone who pays his loans for 50 years is acceptable, but for one default to brand him as a fraud is a wrong mind set)

“Aajkal hamara jo approach hai ke har aadmi chor hai, wo nahi hona chahiye” (Our approach these days of calling , every man is a thief, is not right),” he said.

Indirectly, Gadkari blamed the bankers for the NPA mess, Gadkari said our banking system is such that it does not support sick companies.

“When someone is serious then we put him/her in an ICU, but our banking system first puts a sick company in the ICU and then ensures that it dies,” he quipped.

Though Gadkari started with a disclaimer that he had nothing to do with Mallya. But his remarks later were enough for the opponents to ridicule the government

However, Gadkari did not stop there. He later said if Mallya had “fraud papers” to his name, he should face legal consequences. he also added “Ek galti ka sabko adhikaar hai par wo bona fide honi chahiye” (Everyone is entitled to one mistake, but that mistake should be bona fide). “

Gadkari later also said if banks don’t lend to industries, no project will achieve financial closure, there will be no job creation or economic growth.

On Monday, a court in the UK ordered the extradition of the liquor baron who is wanted by Indian authorities for alleged fraud and loan defaults of ₹ 9,000 crore.
Mallya’s Kingfisher Airlines shut down in 2012 due to cash problems with more than ₹9,000 crore of loans and other dues unpaid and leaving hundreds of employees without jobs.

When asked for his opinion on the ongoing feud between the government and the RBI on the central bank’s autonomy and the sudden resignation of former RBI Governor Urjit Patel Gadkari said the RBI with all its autonomy was still a “part and parcel” of the government and it must abide by the finance ministry’s economic policies.

“On the one hand you are holding us responsible (for problems in the economy) and then if we make decisions, then you are saying we are putting the autonomy of the RBI in danger,” the minister said.

Gadkari, who handles many key infra ministries, asked if the government is held responsible for the economic situation, then how can RBI work autonomously.

“The Supreme Court can be an autonomous body. RBI is also an autonomous body, but does that mean that RBI will be taking 100% policy decisions on its own?” he said.

Calling for a more considered view on non-performing assets (NPA) resolution, he said in a business cycle there are ups and downs but when a company goes through a downward cycle, it has to be supported.

He claimed that the government had done absolutely nothing to jeopardise the central bank’s autonomy, “Even if we accept RBI’s autonomy, it is the responsibility of the central bank to support the vision of the government. We haven’t destroyed it (RBI as an institution) in any way,” he told the media.

“Everywhere there are ups and downs and we have not destroyed any institutions. We’ve not politically interfered in it (in the functioning of RBI),” he said. He also underlined the need to ensure that we have to develop a transparent and corruption-free system that can fast-track the decision-making process and a system in which key government decisions should be binding on every institution.

If RBI wants to be fully autonomous, then hold it responsible for the ills of the economy and not the finance ministry, he said.

Late last month, Gadkari had blamed the RBI for “complicating” project finance and said over 150 projects involving over ₹ 2 trillion investments were struggling to get financial closure.

“Unfortunately, many times the circulars issued by the RBI are creating more complications and this is one of the reasons why I am facing problems as far as financial closure is concerned,” Gadkari had told an awards function here on November 17.