Is Vijay Mallya a scapegoat? The poster boy of bad loans in the Indian banking sector had one grudge against the media and the banking sector. That he was being made a scapegoat to save thousands of other businessmen who owed much more than him to the Indian banking sector. Realising that the government was coming under public pressure and could be forced to take stringent action against him than usual, Mallya took a flight to London, raising questions over Indian investigative agencies’ intent to book the loan defaulter for his alleged act of siphoning off the public money. There are as many as 5,275 wilful defaulters in the country and they owe a combined 56,521 crore to Indian banks. But only Mallya’s name made headlines. No attempts were made to know the real people behind these other companies. The simple reason is Mallya is a big figure in the public eye and people for so long envied his eye-catching lifestyle.
What about those other 5,000 plus ‘wilful defaulters’? Ideally speaking, they too, indulged in the same crime as per the definition of Reserve Bank of India. These 5,000 plus willful defaulters never meant to service their debt just like Mallya. They too, have diverted their funds to other activities. But TV Channels will not find TRPs from these statistics. This means that the promoters of these companies can breathe easy and Mallya cant.
RBI governor Raghuram Rajan recently mentioned that blaming and naming the defaulters and bank was not the right way to clean the system. He went further to say that it is very important to see the circumstances when the loan was given and to understand the reasons behind defaults by companies. Sometimes the companies face a downturn in their industry affecting their loan repayment capabilities; these reasons don’t make them a willful defaulter. The same is the case seen with Vijay Mallya.
David Headley, a US terrorist of Pakistani origin, was testified in an Indian court by video conference. Why can’t Vijay Mallya, who is being treated as a criminal for a business failure, (do the same)? Video conferencing under oath is a legal option accepted by countries across the world. Mallya is willing to repay banks the principal amount of Rs 4,000 crore – the highest offered by any promoter of a defaulting company. Just like in other industries why can’t banks revoke a Strategic debt restructuring in this case too?
Despite several options being open nothing has been done except for his passport being revoked and the government invoking Mallya’s Extradition. Such facts make it convincing to believe that he has been made a scapegoat to hide the entire system that’s just not been bad but has become worse in a past few years.
Priyank Choksi won first place and INR 5000 in the May edition of the Essay Writing Competition Conducted by Meghnad Desai Academy of Economics.