The government decision to recapitalise the public sector banks by infusing Rs. 2.11 lakh crore amounts to virtually pardoning corporates who have not returned loans now totalling Rs 11.5 crore, the CPI-M said on Wednesday.

A statement from the Communist Party of India-Marxist said the government moves came at a time when the banks were burdened by humongous non-performing assets.

“Instead of pursuing the corporates not returning the loans they have taken from the banks…, the government has virtually pardoned the loan defaulters,” it said.

It said that in the last three years, the Modi government had written off corporate loans to the tune of Rs 2 lakh crore.

“This mega concession for the corporates is now being met through public funding of this recapitalization. This is tantamount to the Indian people bailing out the banks that are being looted by the corporates,” the CPI-M said.

“There cannot be any worse expression of crony capitalism than this.

“While loan waivers for the farmers committing suicides due to agrarian distress is refused, the corporates are being encouraged to run away with the loans that they have taken from the monies deposited in banks by crores of Indians.”

The CPI-M challenged the logic advanced by Finance Minister Arun Jaitley that recapitalization would allow the banks to give further loans to the corporates, leading to higher investments and more employment and economic growth.

“This is a flawed logic. Increase in investments per se cannot increase employment and growth rates. What is produced through these investments has to be sold for this to happen.

“In a world of shrinking trade, with Indian exports registering a 20-year rock bottom and the significantly reduced purchasing power in the hands of the Indian people, thanks to demonetization and GST, has drastically shrinking domestic demand, the Finance Minister’s logic is simply unrealisable.”

The CPI-M asked the government to immediately confiscate the properties of the corporates “who are defaulting on returning their loans. The people cannot be asked to pay to protect corporate loot of public money”.