In a startling revelation, the Reserve Bank of India (RBI), responding to a Right to Information (RTI) application filed by social activist Sanjay Ezhawa from Surat, has unveiled a substantial financial development that has sent shockwaves across India’s economic landscape. This disclosure pertains to the nine-year tenure of the BJP-led NDA government, led by Prime Minister Narendra Modi, during which an astounding sum of Rs 25 lakh crore worth of loans was written off. This revelation has sparked widespread debates and captured the nation’s attention.

The NDA government, composed of NDA Government-1 and NDA Government-2, held power from 2014-2015 to 2022-2023. Within this time frame, they authorized loan write-offs totaling Rs 10.41 lakh crore through public banks and an additional Rs 14.53 lakh crore through Scheduled Commercial banks, accumulating to a staggering sum of Rs 24.95 lakh crore. It’s noteworthy that the RBI’s disclosure, while rich in statistical data, does not divulge the identities of the loan defaulters.

This massive write-off constitutes the largest ever disclosed in India’s financial history. To put it into perspective, comparing it to loan write-offs during the UPA governments becomes essential. UPA Government-1 and UPA Government-2 governed for 11 years, from 2003-2004 to 2013-2014. During this period, they approved write-offs amounting to Rs 1.58 lakh crore through public banks and Rs 2.17 lakh crore through Scheduled Commercial banks, totaling Rs 3.76 lakh crore.

The annual figures for loan write-offs are equally astonishing. The UPA Governments wrote off an average of Rs 34,192 crore per year during their 11-year tenure. In stark contrast, the NDA Government-1 and NDA Government-2 jointly wrote off an average of Rs 2.77 lakh crore annually. Essentially, the amount written off by the UPA government in 11 years equals the amount written off by the NDA government in just 17 months.

This colossal Rs 25 lakh crore write-off places a disproportionate burden on ordinary citizens and farmers who had taken relatively smaller loans. The primary beneficiaries of this write-off are the crony capitalists who borrowed substantial sums and subsequently left the country.

The Reserve Bank of India established the Central Repository of Information on Large Credits (CRILC) to collect, store, and disseminate credit data to lenders. As of June 2023, CRILC reported that Scheduled Commercial Banks had written off 3,973 accounts with loans exceeding Rs.5 crore, underscoring the magnitude of the issue.

Out of the Rs 25 lakh crores written off by Scheduled Commercial Banks over the nine-year period from 2014-2015 to 2022-2023, only Rs. 2.5 lakh crore (10% of the total) has been recovered. This raises a critical question: Why hasn’t the Indian government been more successful in reclaiming these substantial amounts?

The data reveals a disconcerting narrative – immense wealth has been funneled abroad by industrialists, and the government’s efforts to recover these loans have yielded limited results. This scenario prompts a fundamental query: Should the nation continue to bear the brunt of such monumental losses with the government’s approval? It’s imperative that public awareness and engagement be heightened if India is to address and overcome these substantial financial setbacks.

The gravity of this financial issue is further emphasized by an RTI response from RBI, revealing that from April 2014 to March 2018, bank loan frauds totaling Rs. 77,000 crore (Rs. 770 billion) occurred under the Modi government. This underscores the pressing need for increased scrutiny and accountability within India’s financial landscape.