Two-and-half-years ago when Narendra Modi was gaining momentum as the prime ministerial candidate by making speeches across the country, he had said at a rally in Jhansi: "Aap mujhe pradhanmantri mant banaiye! Aap mujhe chowkidar banaiye. Mein dilli ja kar ke mein chowkidar ki tarah baithunga. Mein hindustan ki tijori par koi panja nahi parne dunga!"
It literally means "Don't make me the prime minister but a security guard who will sit in Delhi to protect the nation's wealth".
That was at the Vijay Shankhnaad Rally in October 2013. Modi's appeal was heard by the electorate as he stormed Delhi's throne by becoming the leader of a party with single majority, first time in three decades.
After 2 and half years, Modi couldn't keep his promise
But today, almost two years after Modi took over the reins, Vijay Mallya has made the headlines for allegedly siphoning off whopping sums, leaving back state-run banks exasparated. The political, banking, legal and media circles have awaken up after Mallya has left the country and with it, a question mark over the fate of Rs 9,000 crore public money that the banks lent to him.
So, to what extent has Modi succeeded in keeping up to his promise in protecting the nation's wealth? Has the chowkidaar in him failed his supporters?
The ruling BJP has hit back at the Opposition Congress saying the loans were given to Mallya during the days of the UPA but that doesn't make the case strong for the party whose leader had vowed to be the chowkidaar. Did the NDA take up the problem of non-performing assets after it came to power, knowing very well that it has been a major challenge to India's economy?
Why has the problem of bad loans not been addressed?
A sizeable capital from the state exchequer is directed at helping the state-run banks to make their balance sheets look healthy and this makes the government of the country, which is elected by the people, answerable to the latter as to why the big corporate defaulters are not being brought to justice. This is not a new problem as these corporate defaulters make up the majority of the NPAs in the banking sector.
Shouldn't have the government of Modi, who wished to be more a chowkidar than the PM, take special care of Mallya who has openly defied the banking system? Can Union Finance Minister give a convincing reasoning on why moves on Mallya came so late that he conveniently chose a date to fly abroad to escape the law?
RBI governor had alerted the govt: Any step taken yet?
In January, Reserve Bank of India (RBI) Governor Raghuram Rajan warned from Davos, where the World Economic Forum Annual Meeting was held, that bad loans could go out of control if corrective measures were not taken soon.
The trend could see the economy getting caught in a fresh deflationary cycle in 2016 as the bigger part of the economy will be choked if a smaller section of borrowers fail to return the loans. Rajan's forthright words were undoubtledly aimed at Mallya, who oraganised his 60th birthday bash with great pomp in Goa. And this despite the fact that his company has been formally declared as a debt defaulter by the State Bank of India.
Banks equally at fault
If the Mallyas are at fault for reckless treatment of money, the banks also can not escape the blame for they also lend fresh loans to the corporate defaulters whereby the latter just pay the interests. It helps the defaulters avoid the defaulter tag and the banks to show that their loans have not gone bad as interests return immediately.
These strategies are implemented no matter which party is in power at the Centre and the current NDA government cannot evade its own responsibility of taking an initiative to fix the issue. A rough estimate says the top 10 indebted business bodies, who have thrived both during the UPA and NDA rule, have over 7 lakh crore of loans and are struggling to meet the interest-related obligations.
Didn't these facts, along with Rajan's warning about the deepening cisis in the public sector banks, which has been revealed by the stock market, raise enough alarm for the Modi regime? Rajan also found a backing from Uday Kotak, chairman of the Kotak Mahindra Bank, on the poor state of affairs in loan, in Davos.
Why Modi's task as a chowkidar becomes difficult
The problem is politics is so heavily dependent on money power today that it becomes a herculean task for the political leadership to back its own words uttered before the elections. Rajan made a bold move in putting the ball in the court of Modi and Jaitley, irrespective of the finance minister's efforts to convey a feel-good message on India's financial health at Davos.
But can the NDA really take on the crony capitalists and bring them to justice as a step towards saveguarding "Hindustan ki tijori"? On the contrary, any effort to give these crony capitalists a relief will be seen as an attempt to protect those who have touched the "tijori".
Modi's sloganeering in Jhansi has not delivered in reality.