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Banking system went haywire under Manmohan; Chidambaram helped Gitanjali with 80:20 gold scheme, says BJP

There was a Scheme 80:20 introduced in August 2013 and repealed in November 2014. On May 16, 2014, the date of the declaration of results, the then finance minister gave 'aashirvaad' to seven private companies under the 80:20 Scheme. One of those companies was Gitanjali, says Union minister Ravi Shankar Prasad.

twitter-logo BusinessToday.in   New Delhi     Last Updated: March 6, 2018  | 11:01 IST
Banking system went haywire under Manmohan; Chidambaram helped Gitanjali with 80:20 gold scheme, says BJP
Union Law Minister Ravi Shankar Prasad

Ever since the PNB fraud worth Rs 12,700 crore has come to light, the NDA government has been facing for flak from the Opposition parties for letting accused Nirav Modi and Mehul Choksi slip out of the country. But the Centre seems to have got some ammo to hit out at the previous UPA government. Union Law Minister Ravi Shankar Prasad, in a press conference on Monday, said it was during the "so-called economist Prime Minister Manmohan Singh" that the banking system was derailed and that former finance minister P Chidambaram helped Mehul Choksi's Gitanjali Group through the UPA government's 80:20 Gold Import Scheme.

"There was a Scheme 80:20 introduced in August 2013 and repealed in November 2014. On May 16, 2014, the date of the declaration of results, the then finance minister gave 'aashirvaad' to seven private companies under the 80:20 Scheme. One of those companies was Gitanjali," Ravi Shankar Prasad said in a press conference in New Delhi.

"Chidambaram and Rahul Gandhi must answer why this was passed on the day of the results to benefit these seven companies? Chidmabaram wasn't doing it himself, but they had his blessings," added the minister.

Prasad said it was because of the advances given during the UPA government that the non-performing assets (NPAs) have risen up to 82 per cent. "Time and again we have stated that not a single loan given under our govt is NPA. In 2008, the total advance to people given by the banks was Rs 18.06 lakh crore. By March 2014, the amount went up to Rs 52.15 lakh crore. The stressed asset identified out of this was only 36 per cent," ANI quoted the minister as saying.

The minister also accused former Prime Minister Manmohan Singh for interfering with the banking system. "Under the 'so-called economist' Prime Minister Manomhan Singh, the entire banking system went haywire due to all kinds of interference with it," he said.

80:20 GOLD IMPORT SCHEME

Launched by the previous UPA government in August 2013, the 80:20 Scheme allowed traders to import gold only after they had exported 20 per cent of gold from their previous import. During a Parliament's Public Accounts Committee (PAC) meeting with the Ministry of Finance officials last week, the BJP members highlighted the issue of the 80:20 Scheme.

They alleged the scheme, which was launched during P Chidambaram's tenure, was misused by Mehul Choksi for money laundering, reported PTI.  The PAC's sub-committee, which was headed by BJP Member of Parliament (MP) Nishikant Dubey, also asked the top officials of the Revenue Department, Enforcement Directorate (ED), CBDT (Central Board of Direct Taxes), and the Central Board of Excise and Customs (CBEC) to share all the details regarding the scheme within a week.

SCHEME RESULTED IN RS 1 LAKH CRORE LOSS: CAG

During the PAC meeting held last week, the members also discussed the CAG (Comptroller and Auditor General) report, which was released in 2016. The report said the UPA's 80:20 scheme had resulted in Rs 1 lakh crore loss to the exchequer, reported PTI. To support the earning of one US dollar (around Rs 60 then) for jewellers, the government had to bear the expenditure in the form of duty foregone of Rs 221.75, said the CAG report.

The BJP members in the committee have alleged that the scheme was used by jewellers for "round tripping of black money and money laundering", and that all of this happened under Chidambaram. The round tripping is a process by which black money that goes out of the country returns as white money.  

Firestar Diamond owner Nirav Modi allegedly defrauded the Punjab National Bank of over Rs 12,700 crore, while his paternal uncle and Gitanjali Group owner Mehul Choksi also defrauded several public sector banks of thousand crores of rupees. Both of them fled the country in January first week.

Meanwhile, a special CBI court in Mumbai has sent Vipul Ambani, CFO of FireStar Diamond, and 5 other accused - Kavita Mankikar, Arjun Patil, Rajesh Jindal, Kapil Khandelwal and Niten Shahi - to judicial custody till March 19.  

 

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