The Congress on Thursday alleged loans were being offered “on a platter to some friends of the government” and sought to know who is pressuring banks to grant such loans, putting the economy at “colossal risk”. The Opposition party cited a New York-based Credit Research firm CreditSights analysis on the debt position of the Adani group to claim that the total gross debt with all key Adani entities is close to ₹2,30,000 crore.
Addressing a press conference at the AICC headquarters here, Congress spokesperson Gourav Vallabh said if one analyses the economic and the financial condition the BJP government has inflicted upon the country, one would have no reason not to believe that it is a “nightmare”.
“One of the most worrying aspects is the spiralling debt pattern. The outstanding internal and external debt and other liabilities of the central government at the end of 2022-2023 are estimated at ₹152.17-lakh crore, as against ₹55.9-lakh crore at the end of 2013-14. So, per capita debt on us increased from ₹43,124 (March 31, 2014) to ₹1,09,000,” he said.
Vallabh said loans are being offered on a “platter to some friends of the government” which has created an anxious position for the nation, on top of the national debt obligations.
“Recently, a New York based Credit Research firm CreditSights published its analysis on the debt position of the Adani group. Startling facts have emerged from this analysis. The total gross debt with all key Adani entities is close to ₹2,30,000 crore,” he said.
‘Destruction of economy’
Congress general secretary Jairam Ramesh alleged that on the one hand, Prime Minister Narendra Modi is ensuring all kinds of contracts for his “friends” and on the other, treasuries of banks have been opened to promote their businesses. “A loan of ₹2.3-lakh crore was given without taking into account the risks. Development of friends, destruction of economy!” he said on Twitter.
Vallabh said the credit report has drawn up several credit concerns ranging from the group’s overly-leveraged aggressive expansion to forays into new or unrelated businesses, environmental, social and governance (ESG) risks, and the limited evidence of equity capital injections by Gautam Adani and his family.
“Out of the major loans obtained by the Adani Group (April 2020 to June 2022) of ₹48,000 Crore, 40 per cent of it is funded by SBI alone i.e. ₹18,770 Crore,” he said citing the report. The report calls out that overly ambitious debt-funded growth plans could eventually spiral into a massive debt trap, he said.
Vallabh also recalled the Congress allegations on the claim by the chairman of the Sri Lankan state-owned Ceylon Electricity Board before a parliamentary panel of that country that Modi “pressured Sri Lankan President Shri Gotabaya Rajapaksa to award a wind power project to the Adani Group”.
“Also, as soon as the Modi government came to power in 2014, the SBI drafted an in-principal agreement with the Adani group for a $1 billion facility and brought in several banks worldwide to provide funding,” he said.
‘Stealthy acquisition of NDTV’
“The latest gimmick has been the stealthy acquisition of 29.19 per cent stake by the Adani Group in a leading television news channel (NDTV). This was executed without any input from, conversation with, or consent of the channel founders. The Adani group also announced an open offer to buy another 26 per cent stake,” he said.
Vallabh said the BJP-led Centre must answer who from the government is pressuring banks such as the SBI to grant loans of such proportions putting the national economy and banks at colossal risk. “Why are the finance ministry and SEBI sitting idle on the entire hostile acquisition episode of a leading TV news channel,” he asked.
“What is the Modi government’s plan to save the economy and specific sectors from collateral and cascading damage in case of default or loan repayment delay as the Adani group’s debt is consistently increasing,” the Congress spokesperson further asked.
August 25, 2022