Modi using public money to bailout Jet Airways: Cong

The Congress on Wednesday accused Prime Minister Narendra Modi of doling out public money by directing state-run banks to bailout Jet Airways by converting its debt into equity.

Congress chief spokesperson Randeep Surjewala raised strong objections to the proposal of a State Bank of India-led consortium of banks to bailout the "bankrupt" private airline.

"Reports in public domain now reflect that PM Modi wants to give a 'bailout package' to Jet Airways by directing SBI and other PSU banks to convert the Rs 8,500 crore debt for equity shares of Jet Airways valued at Re 1. SBI and other banks will thus become owners of 50 per cent of a bankrupt private airline," he told reporters.

There was no immediate response from the government or SBI.

Surjewala also alleged that the National Infrastructure Investment Fund (NIIF) has also been directed to buy a 24 per cent stake of Etihad Airways in Jet at a value of rupees 150 per share.

This, he alleged, is being done without any independent financial valuation of Jet Airways or any due diligence. The Modi government is in such a hurry that it is not even willing to await the result of their own investigations.

"Why is the Modi government giving a 'bailout package' to a bankrupt corporate entity like Jet Airways, owned by foreign investors, out of public money but not to India's debt-ridden farmers?

"Will the Modi government now save every defaulting crony capitalist out of public funds? Is this the new 'Modi Model' of syphoning off public funds?" he asked.

Surjewala said the prime minister and his government, as well as banks, are only custodians of public money and cannot take such a decision on their own.

The Congress leader alleged that this is being done without any due diligence and at a time when an investigation is underway into the financial irregularities in the beleaguered airline.