Citizens' Issues
You pay taxes when the PSUs are writing off thousands of crores in bad debts

About 14 PSUs like SAIL, BoB, ONGC and AAI have written off Rs7,500 crore as bad debts while the common citizens are forced to pay more taxes and higher prices for essential commodities as well as for petrol, diesel and LPG


The Indian government has announced several austerity measures to contain expenditure. Meanwhile, several public sector units (PSUs) are writing off outstanding worth thousands of crores, reveals replies received under Right to Information (RTI) Act.

 

According to information procured by Pune-based RTI activist, Sanjay Shirodkar, between 2006 to March 2012, around 14 PSUs like Steel Authority of India (SAIL), Coal India, ONGC, Bank of Baroda (BoB), NTPC and Airports Authority of India (AAI), showed around Rs7,573.2 crore as bad debts or unrecoverable amount.

 

Out of the total outstanding, ONGC, National Buildings Construction Corporation and BoB have written off Rs2,095.4 crore. BoB, the state-run lender, itself wrote off debts of about Rs1,820.35 crore during March 2008 to March 2011. The lender also settled Rs81.52 crore, as per the information provided by the bank.

 

Between 2003 and March 2012, ONGC gave loans of Rs1192.03 to other PSUs and other bodies, while the oil explorer gave Rs1.48 lakh crore as loans and advances to its subsidiaries during the same period. ONGC, in its reply to an RTI, said, “After due examination, long outstanding/disputed debts from customers which are not settled inspite of best efforts are written off (total Rs133.40 crore in past 10 years) after a review of internal audit and with the approval from the competent authority.”

Recently, the government has allowed foreign direct investment (FDI) in aviation. This means foreign airlines can pick up to 49% in Indian carriers. Looking at the sorry state of the domestic carriers, it is no wonder that state-run Airports Authority of India (AAI) comes out with highest number of cases of cheques bounced. As of March 2012, AAI has an outstanding of Rs1,139.30 crore out of which Rs163.80 crore are from bounced cheques.

 

NTPC, the power producer, has shown around Rs836 crore as outstanding since February 1997 and there is not a single effort from the company for any settlement of this amount.

 

As per paying income-tax is concerned, there were 3.24 crore taxpayers or about 2.7% of the population ended up paying taxes, according to a report by the Standing Committee on the Direct Tax Code Bill, 2010. There were 2.9 crore or about 89% of the taxpayers who earn less than Rs5 lakh and yet end up paying over 10% or Rs50,000 as tax. For FY12, the personal tax collection increased 16.2% to Rs1.93 lakh crore, bulk of which has come from people who earn less than Rs5 lakh a year.

 

The point is when the common citizen is forced to cough up hard-earned money as taxes, why the government and the PSUs are writing off crores of rupees as bad debts.

 

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COMMENTS

SuchindranathAiyerS

4 years ago

This is typical Indian Government legerdemain. The Neta Babus have been doing this for ages. I saw this game of looting the Mysore Maharaja's legacy going on in Karnataka as a helpless State Bank Officer. More recently, The Rashtra Potty got the UTI to buy up ONGC Public Issue that no self respecting investor was willing to buy into.

NSriramamurty

4 years ago

GOI should not give any Money Support for PSUs,writing off above Rs.50 Crores,as GOI gives From our TAXES Amount only.Small write offs is inevitable in any Business.SAIL,AAI might be taking GOIs Money Support-whish should be Stopped.
BOB write off is hoped to be as per GOIs FARM LOan Waiver Scheme.

subrahmanian s h

4 years ago

There are 3.24 crore taxpayers or about 2.7% of the population end up paying taxes, according to a report by the Standing Committee on the Direct Tax Code Bill, 2010.
There were 2.9 crore or about 89% of the taxpayers who earn less than Rs5 lakh and yet end up paying over 10% or Rs50,000 as tax.
Pensioners beware!
I'm a central pensioner. My bank is SBI. Without any notice my pension has become unique - in the sense it's not constant!
It fell by around Rs 200 for the past 4 months and not constant too. Reply is still pending despite 3 reminders!!
The branch officers and officials tell me it's TDS!!!
My savings FDs are often taxed despite 15H submissions!
Could any one clarify?

rajan gupta

4 years ago

Providing absolute figure doesn't make any sense . Bad debts is a common thing in business .Even private banks and institutes are also writing off the very huge amounts. So in my view these figures should be shown as a % of sales or advance and should be compared with the peer group.

Further all most of above firms are profit making even after writing off of these bad debts . so how we can say that it is tax payers money has been wasted ,it is just a part of expenses .

REPLY

PPM

In Reply to rajan gupta 4 years ago

Did any PSU return the money they got as various funding (recent one is recapitalisation of PSU banks)to the GOI?

rajan gupta

4 years ago

Providing absolute figure doesn't make any sense . Bad debts is a common thing in business .Even private banks and institutes are also writing off the very huge amounts. So in my view these figures should be shown as a % of sales or advance and should be compared with the peer group.

Further all most of above firms are profit making even after writing off of these bad debts . so how we can say that it is tax payers money has been wasted ,it is just a part of expenses .

JPC chairman refers to Lok Sabha Speaker demand to summon Chidambaram

While BJP has been demanding calling Prime Minister Singh and Chidambaram before JPC, Left party members in the panel also made a strong pitch to call the Finance Minister

New Delhi: PC Chacko, chairman of the Joint Parliamentary Committee (JPC) on Thursday decided to refer to the Lok Sabha Speaker the demand to summon Finance Minister P Chidambaram as a witness before the panel on 2G but virtually ruled out calling the Prime Minister even as BJP continued its boycott, reports PTI.

 

"According to past precedents and rules, members of a committee pass a unanimous resolution to call a minister. The request is then sent to the Speaker for a final ruling as rules do not permit calling a minister before a committee for either giving evidence or consultations.

 

But in this case, since there is no unanimity on calling the Finance Minister, I have decided to refer the matter to the Speaker which is allowed under rules...I will refer the matter of calling of a minister. There is no precedence to call the Prime Minister," Chacko said after today's meeting.

 

The decision was taken even as the six BJP members in the JPC, who had been boycotting the meetings accusing Chacko of not taking a decision on their demand to call Singh and Chidambaram, today stayed away from the proceedings.

 

While BJP has been demanding calling Prime Minister Manmohan Singh and Chidambaram before JPC, Left members in the panel - Gurudas Dasgupta (CPI) and Sitaram Yechury (CPM) - today made a strong pitch to call the Finance Minister.

 

In a strongly worded letter to Chacko today on behalf of his party colleagues, Yashwant Sinha of BJP said, "...we have strongly demanded that in order to arrive at the right conclusions, the Committee must record the evidence of the Prime Minister and the Finance Minister. Their appearance before the Committee, in view of their role in the decision making process is absolutely necessary."

 

Responding to the letter, Chacko said except for BJP, no one else has demanded calling the prime minister as witness.

 

"Even the CPI and CPM said they do not want to call the PM, but only the Finance Minister...BJP knows it is not in the rules to call PM...it is a political decision," he said.

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COMMENTS

M G WARRIER

4 years ago

These days, PM and his colleagues do not get much opportunity to clarify things in parliament. You can blame opposition for the predicament. Joint Parliamentary Committees have been keeping better decorum. Therefore, not depending on precedents or ‘rules’, JPC Chairman P C Chacko should persuade at least FM to give JPC an opportunity to seek clarifications Chidambaram may be able to give. This should be considered as an opportunity to put records straight.

Centre seeks review of SC verdict on CIC appointment

The government pleaded that the apex court should have a relook at its order on appointment of CICs as it is against the provisions of the transparency law

New Delhi: The Centre on Thursday moved the Supreme Court seeking a review of its verdict which held that only sitting or retired Chief Justices of High Courts or a Supreme Court judge can head the Central and State Information Commissions, reports PTI.

 

The government pleaded that the apex court should have a relook at its 12th September order as it is against the provisions of the transparency law.

 

The apex court had in its judgement said that like other quasi judicial bodies, people from judicial background be also appointed as members of the Central and State Commissions which is to be done after consulting with the Chief Justice of India (CJI) and Chief Justice of the respective High Courts.

 

It had directed the government to amend RTI Act for it.

 

"Chief Information Commissioner at the Centre or State level shall only be a person who is or has been a Chief Justice of the High Court or a judge of the Supreme Court of India," a bench of justices AK Patnaik and Swatanter Kumar had said.

 

The bench had passed the order on a PIL challenging section 12 and 15 of the Right to Information Act, 2005 enumerating the qualifications needed for the appointment of members to the commissions.

 

The bench, however, had refused to quash the sections but asked the government to modify it so that people from judicial background are also preferred for the post.

 

Currently, none of the eight members of the Central Information Commission (CIC), including the Chief Information Commissioner, is from judicial background.

 

The CIC comprises one Chief Information Commissioner and 10 Information Commissioners.

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COMMENTS

Abdulraheman

4 years ago

CIC is more people friendly than the average SC or High Court verdicts. " Holier than though " attitude of judiciary is anti people move. People must have right to speak that: Can Police nab the judicial fraud of a judge in his verdict and file a criminal case against him and his malafide nexus with the lawyer , of course, not without prior sanction of Governor or President of India as the case may be ? I repeat that the judicial fraud should not be seen in isolation but it is always two way trafic of Judge and lawyer with money or political power.

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