The crisis at IL&FS came to light in September when the groups and its subsidiaries defaulted on Rs 1,000 crore from Small Industries Development Bank of India (SIDBI).
A day after National Company Law Appellate Tribunal (NCLAT) stayed on all proceedings against crisis-hit IL&FS group and its subsidiary companies over any past or future loan defaults, Finance Minister Arun Jaitely lauded the Narendra Modi-led government’s efforts to contain the crisis at debt-ridden IL&FS, saying it would have not been possible in case of a weak leadership at the Centre.
“A weak leadership, within days of the crisis, could not have handled IL&FS the way the present government did, and therefore a crisis in the making was handled with swiftness,” Jaitley said while speaking during the annual general meeting (AGM) of industry chamber ASSOCHAM.
On Tuesday, NCLAT decided to stay all proceedings against IL&FS “till further order”. The move comes after Mumbai bench of National Company Law Tribunal (NCLT) refused to grant a 90-day moratorium over loans to the group. Besides, the corporate affairs minister had requested the court to restrain creditors of IL&FS from filing suits in case of non-repayment of loans.
Meanwhile, Jaitley also said that India presently needs a strong, decisive government at the centre to take the swift decisions as well as maintain high economic growth. In the April-June quarter of the current financial year 2018-19, the Indian economy recorded a growth of 8.2% current fiscal, while it grew at 6.7% in the financial year 2017-18.
Debt-laden IL&FS, which has a long and short-term debt of Rs 91,000 crore, of which Rs 57,000 crore is taken from PSU banks, has defaulted on several short-term repayments in the recent past. The company needs an immediate capital infusion of Rs 3,000 crore.
The crisis at IL&FS came to light in September when the groups and its subsidiaries defaulted on Rs 1,000 crore from Small Industries Development Bank of India (SIDBI). After a few more defaults, the central government had to intervene on October 1 by superseding the board with the appointment of Uday Kotak as its chairman.
Meanwhile, it was also reported that the National Highway Authority of India (NHAI) may acquire incomplete projects of IL&FS for revival or inviting new bid. The Uday Kotak-led board also held two meetings in which top executives were appointed.
After its first meeting on October 4, the board of the company said that the IL&FS crisis is much more complex and would require time to resolve, while further adding that it was not an impossible task to do. Most of the NBFCs have come under pressure due to the liquidity stress at IL&FS as banks – both public sector as well as the private sector – have stopped lending to them.