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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.