The Congress on Saturday accused the Modi government of "financial scam management" and alleged that it was selling the family silver of the LIC and the SBI to bailout a private firm, IL&FS, which is saddled with long-term debt of Rs 91,000 crore.

Talking to the media, party media panellist Gourav Vallabh also said that Prime Minister Narendra Modi's pet project of GIFT city in Gandhinagar was "virtually a gift to IL&FS" and said his "role" needs to be seriously probed.

He said the Modi government has "systematically demolished" the foundations of the banking and financial services sector of the country.

"The latest episode in financial scam management series is the bailing out of Infrastructure Leasing & Financial Services Limited (IL&FS), - which is 60 per cent privately owned, out of which 36 per cent is owned by foreign entities and the rest 39.43 per cent is owned by public sector banks (PSBs) and the LIC," he said.

Vallabh alleged that the BJP-led government's modus operandi was to bail out corporate entities by using profit-making PSUs, thereby jeopardising the savings of crores of Indians.

"We have seen how ONGC was used to cover up the GSPC Scam, how LIC is bailing out a loss making IDBI Bank and now how LIC & SBI are being used to bail out a 60 per cent privately-held corporate entity i.e IL& FS. Is this the ‘Lehman Brothers Moment' for Modi government." he asked.

Vallabh said the total debt of IL&FS increased by a whopping Rs 42,420 crore in just four years of Modi government.

"This means that IL&FS' debt was increasing at the rate of Rs 900 crore per month under Modi government. If we add long-term and short-term debt, it is more than Rs 1,20,000 crore. It reflects that for a capital of one rupee, there was a Rs 7.71 debt in 2013-14 and under the present government, it has jumped by a massive 117 per cent to a debt of Rs 16.78 in 2017-18."

Vallabh said the Modi government's "economic mismanagement has left the IL&FS into a precarious financial situation", where it does not have the required cash to even sustain them and pay their employees and other dues.

"By forcing LIC & SBI to inject Rs 7500 crore, the Modi government is only providing a band-aid to a problem, which requires a surgery. Even the wound was inflicted by Modi government itself. It will lead the public-held LIC and SBI into a cycle of servicing unfathomable debt of a private company forever in future," he said.

He alleged that the IL&FS management was indulging in gold plating of contracts through their favoured associates. "The management is diverting IL&FS business to their personal entities siphoning off the funds, causing huge losses to banks, financial institutions and shareholders," he alleged.

Vallabh said a recent study on the borrowings of IL&FS has noted that there could be a systemic risk to PSBs and financial institutions.

"It is understood that SBI has already treated the exposure as NPA while there are others who are mulling legal recourse including some private finance entities," he said.

He said Modi's pet project of GIFT (Gujarat International Tec-City), which is pending since 11years, was envisaged with much hype and hoopla under the aegis of Gujarat Urban Development Corporation (GUDC).

"The entire development and the choice of partners is with IL&FS whose contribution is merely Rs. 2.5 Crore for 50 per cent stake," he said, adding that the land was to remain in the government's name, it has been fully transferred to the project company.

"This project has been a GIFT to IL&FS despite the fact that not even project management consultancy is provided by it."

He alleged that IL&FS "had outsourced the project management consulting work to another private operator." "The role of PM Modi needs to be seriously probed," he added.

The party asked why IL&FS has not been subjected to oversight either by Comptroller and Auditor General or the Central Vigilance Commission as the PSBs and LIC have 40 per cent stake.

"Why is the Modi government bent in pouring the hard earned money of India's people to bail out a semi foreign entity?" he asked.

First Published:Sept 29, 2018 7:33 PM IST