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Narendra Modi’s bank recapitalisation plan triggers fresh political battle ahead of Gujarat; here’s how

Modi government’s decision to recapitalise India’s ailing banks with Rs 2.11 lakh crore has been welcomed by the industry and experts.

bank recapitalisation, demonetisation, narendra modi, gujarat elections, gujarat assembly elections, manish tewari
New Delhi : Union Minister for Finance and Corporate Affairs, Arun Jaitley with Finance Secretary Ashok Lavasa, Revenue Secretary Hasmukh Adhia, Chief Economic Adviser (CEA) Arvind Subramanian and other top officials during a press conference at National Media Centre in New Delhi on Tuesday. (PTI Photo)
bank recapitalisation, demonetisation, narendra modi, gujarat elections, gujarat assembly elections, manish tewari
New Delhi : Union Minister for Finance and Corporate Affairs, Arun Jaitley with Finance Secretary Ashok Lavasa, Revenue Secretary Hasmukh Adhia, Chief Economic Adviser (CEA) Arvind Subramanian and other top officials during a press conference at National Media Centre in New Delhi on Tuesday. (PTI Photo)

Modi government’s decision to recapitalise India’s ailing banks with Rs 2.11 lakh crore has been welcomed by the industry and experts. However, the opposition parties have attacked the government decision. Congress party has even said, “This is too little, too late”. The opposition has noticed the “coincidence” between the bank recapitalisation plan announcement and demonetisation as the former comes almost one year after the former decision.

The Aam Aadmi party supporters are circulating a tweet of Delhi Chief Minister Arvind Kejriwal on December 8 last year, in which he had said, “Don’t loan this to big corporates now. Either waive off all farmers’ loans or deposit Rs 10,000 in each jan dhan account.”

Kejriwal had tweeted this after Prime Minister Narendra Modi had said that Rs 5 lakh crore was deposited in banks in mere 10 days of demonetisation.

The AAP supporters are now claiming that the government is using the taxpayers’ money to bail out banks and big corporates. Last year, Kejriwal had claimed demonetisation was the “biggest scam” to help corporates. The party has now planned to observe November 8, the date of noteban announcement last year, as “Dhokha (cheating) Diwas”.

Not just AAP, the Congress has also attacked bank recapitalisation plan.

“The fact is if the Indian economy was a wish horse then the finance minister would have rode it. In the past 41 months, Arun Jaitley has created a new bumper sticker and it reads as ‘Honey! I sank the Indian Economy’; so therefore the finance minister is trying to make excuses for his complete mishandling the Indian economy,” Congress leader Manish Tewari told ANI on Tuesday, referring to the Hollywood movie of the 80s – sci-fi comedy – ‘Honey, I Shrunk the Kids’.

“The economy is on an absolute free fall and all these lucrative schemes, which he has announced are basically directed at and again trying to fool the people before the Gujarat Elections. Arun Jaitley should acknowledge that he has failed as a finance minister and has also sunk the Indian economy. Nothing after this will be able to save him from the ire of the people whether it is the ‘Gabbar Singh Tax’ or it is the ‘faulty demonetisation’,” he said.

Congress spokesperson Randeep Surjewala said the decision to recapitalise banks has turned out to be a visionless damp squib that failed to impress either the Indian industry or the common people.

Claiming the decision to recapitalise public sector banks lacked a road map or time frame, he said, “Borrowing money (Rs 1.35 lakh crore bonds plus part of Rs 76,000 crore from market) to recapitalise banks would obviously mean breaching the fiscal deficit target. This is a desperate move by a Finance Minister groping in the dark as demonetisation and GST failed to bring in the promised Rs 4/5 lakh crore.”

As the political battle brews ahead of assembly elections in Gujarat and Himachal Pradesh, the BJP is assured that bank recapitalisation will boost lending, jobs and economy. In a series of tweets on Tuesday, BJP chief Amit Shah said the bank recapitalisation plan was a “courageous” decision, to give impetus to businesses but also provide job opportunities to the youth.

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