A political party that blames the banking system’s non-performing assets (NPAs) squarely on the opposition has little understanding of the subject and an major ability to play down errors of self to one’s own advantage. And yet, this what is happening in India today. NPAs have quadrupled in the last five years from Rs 2.3 lakh crore to Rs 10.39 lakh crore. This is the figure from 2014 to 2018.Finance minister Arun Jaitley has described the NPA issue to be a purely ‘legacy problem’. This is not only biased, but also not the right way to approach and tackle the problem of bad loans. Nothing stops the BJP from declaring the growing amount of NPAs to be a national issue that needs formulation of urgent policies of redressal. What is more worrying is that it does not look like the situation is fully on the path to the recovery. The insolvency and bankruptcy proceedings come with its own flaws, while politics at the RBI and an unhelpful Supreme Court order are helping corporates continue to pass the hot potato while continuing to default on interest payments.Finance minister Arun Jaitley has called NPAs a ‘legacy problem’. Credit: ReutersWhat doesn’t help is when the BJP claims that not a single loan after 2014 has turned into an NPA. Is this not misleading, especially because there is little assurance that any loan given out after 2014 has not or will not turn into a bad loan? K.V. Thomas, the chairman of the Parliamentary Accounts Committee, has revealed that corporate houses account for 70% of the NPAs of the banks. In 2018 alone, total bad loans grew by a whopping Rs 3.13 lakh crore. It is difficult to reconcile this with the fact that India is one of the fastest growing economies in the world. India’s banking system was robust enough in the past to withstand the 2008 financial crisis. It still is robust enough to fight off the NPA crisis. Allowing big haircuts on industry loans and resenting spending on the poor does not look good or make sense for India. The instances to prove the same are innumerable. These corporate houses and companies together owe India and it’s public sector banks a sum of Rs 5 lakh crore in debt. Considering the earnings of both the corporate houses before tax, much of these outstanding loans could well turn into bad assets and subsequent NPAs.Also Read: Raghuram Rajan Explains the Origins of India’s NPA CrisisSo blaming NPAs on ‘legacy’, as a method of assigning blame, is a bad idea. Jaitley, in another attempt to cover up, blamed projects in power, infrastructure, steel and mining sectors for the resulting NPAs. Not realising that most of the companies in business in power, infrastructure, steel and mining are owned primarily by Reliance, Adani, Vedanta etc. Not to also forget that the power plants for the specified projects were set up on land owned by farmers leading to their displacement and loss of livelihood. The top ten corporate groups in India owe more than Rs 5.73 trillion to state-controlled banks. This kind of generic regulatory control on the government’s part is mainly affecting the credit flow to small and medium-sized enterprises (SMEs). So the RBI should distinguish between genuine performance related loans and corporate refinances simply to write off existing loans that take the banking system for a ride.There was a time when China’s NPAs were far higher than that of India’s in 2000s. Since then, China has made constant efforts like reform of state-owned enterprises (SOEs), creation of asset management companies, incentives like tax breaks exemption from administrative fees and transparent evaluation forms to fine-tune NPAs. Resultantly, today China’s NPAs are far lesser than that of India’s. Public money and private wealthA case study by Oxfam has suggested that 1% of India’s rich own 58% of the nation’s wealth. In this break-up, are the two Ambani brothers, the younger who is alleged to have gained from the Rafale controversy. The older Ambani, Mukesh, who has had his own past with government assistance, has a net worth of over Rs 3 lakh crore. The point here is that the people mentioned above are far from ‘in need’. The people who actually need assistance today are the ones below the poverty line, living in the most inhuman conditions. Most of them are so severely affected that they end up losing their life because of the sheer lack of basic hygiene and other facilities. Public money being squandered in writing off corporate loans would be much better utilised in executing the Congress’s NYAY scheme on the ground.Also Read: Recognising the Challenge of Income Inequality in IndiaTherefore, it is inexplicable, unreasonable and unfair that the BJP is asking questions of how the amount of Rs 3.6 lakh crore slated for the NYAY scheme would be raised. When the act of helping and bailing out big business houses runs into thousands of crores, nobody raises eyebrows or questions. Is this not taxpayer money too? The dreams of India’s corporate defaulters and nightmares of its country’s poorest are linked — whether we see it that way or not. Amiti Pande is general secretary, Madhya Pradesh Youth Congress