How bad was UPA?

March 04, 2025

In 1997, Vikram Kothari was honoured as the best investor. In 2005, his company joined the 100 crore club. Many Bollywood film stars like Salman Khan and Raveena Tandon used to advertise for Rotomac pen which had a Hindi tag line ‘likhte likhte pyar ho jaye’. Rotomac was on everyone's lips and there was a Rotomac pen in every pocket.

The decades 2000s saw a decent economic boom in Indian economy. Despite the success of the Rotomac Company involved in the stationery business, Vikram Kothari started taking huge loans from banks and started investing them aggressively in different businesses, which resulted in neither running the business nor making any profit. Slowly and gradually the company's debt kept increasing.

The story line is exactly similar as Vijay Mallya of UB group, who ventured out from traditional liquor and brewery business to unrelated business like glamorous airline operation. This is the time when the infamous ‘phone banking’ scam involving PSU banks took place. The UPA government encouraged PSU bank managers to give loans to businesses even without doing the necessary homework. This led to birth of fugitives businessmen like Vijay Mallya, Nirav Modi, Mehul Choksi etc. who took huge loans for business expansion considering a positive business sentiment. Till 2010 everything was ok as India’s annual GDP growth was at 10%.

Then came the disaster from 2011 to 2014. Indian GDP became 5% by 2014. Many high profile business collapsed. Even big industrialists and businessmen like Ratan Tata and ex-Infosys chairman Narayan Murty complained to PM Dr. Manmohan Singh that business houses are getting squeezed like anything. Many big business houses collapsed under the debt. The downfall of the Rotomac pen company started with huge debt. The company's promoter Vikram Kothari was accused of taking loans fraudulently and not repaying the loans. Vikram Kothari had taken loans from seven banks, but was unable to repay them. The first loan was of Rs 200 crore in 2008, followed by Rs 520 crore in 2010. Then the process of taking loans increased every year. It was alleged that Kothari would take loans in someone else's name and invest the money somewhere else. Soon the loan amount increased to Rs 2,919 crore and its interest increased to Rs 776 crore. That is, the total outstanding amount increased to Rs 3995 crore, which was not easy for the company to repay.

Kothari had taken so much loan from these seven PSU banks -

Indian Overseas Bank had a due of Rs 771 crore.

Bank of India had a due of Rs 754 crore.

Union Bank of India had a due of Rs 459 crore on Rotomac.

Bank of Baroda had a due of Rs 457 crore.

Allahabad Bank had a due of Rs 330 crore.

Orient Bank of Commerce owed 97 crores and

Bank of Maharashtra 50 crores.

CBI exposed the scam. Rotomac's business came to a standstill due to not being able to repay the huge loan. Meanwhile, seeing the company getting ruined, there were talks of Vikram Kothari going abroad, after which CBI took a big action and arrested the company's owner Vikram Kothari. Then an investigation started regarding the company's loan and other things, in which a scam of about Rs 3700 crore came to light. This is not just a simple case of business failure or financial scam but overall economic stagnation.

What is the root cause of this problem? Most people will say congress era corruption when senior congress leaders influenced PSU banks to give loans blindly as part of came called ‘phone banking’. PM Modi multiple times raised the issue of congress’s phone banking scam as the fugitives are still abroad. But this is only the partial reason.

The real reason is ‘NAC’. UPA era super PM Sonia Gandhi was made the chairperson of the National Advisory Council (NAC) and she was given the status of a Union Cabinet Minister. The members of National Advisory Council, were many famous leftist, communist, Maoists, librandµ andolan-jivi from all over the country like Harsh Mander, Teesta Setalwad, Shabnam Hashmi, Yogendra Yadav, Mihir Shahan, Farah Naqvi, Jean Dreze, Madhav Gadgil, Aruna Roy, Anu Aga, Mirai Chatterjee etc. All its members were given the rank of Cabinet Secretary, all were given accommodation in Delhi, all were given a salary of Rs 10 lakh, other allowances, flight fare and everything else.

The NAC actually diluted power of UPA PM Dr. Manmohan Singh by creating some NGO owners or andolan-jivi to become power centre. This NAC prevailed over Environment minister and forest minister Jayanti Natarajan and Jayram Ramesh to block most of the mega projects and border road development plants in the name of environment protection. Gujarat CM Narendra Modi called this restriction as ‘Jayanti Natarajan tax’. Industrial development suffered and annual GDP growth came down from 10% in 2010 to 5% in 2014 and this led to exit of congress party. The last three years of UPA was terribly bad. This era was also called ‘policy paralysis’ period. This is the time when China was growing at 14% which was nearly three times more than India’s growth rate.