Recently, Bangalore-based businessman Vijay Mallya was all over the news for having a loan of Rs. 10,000 crores loan on his head. The subject of our interest absconded by night and took refuge in London, with Indian police forces and banks chasing behind. Amidst all this confusion, the media perhaps forgot about a bigger, more serious fraud of Rs. 40,000 crores that could’ve taken place in our country. Yes, you heard it right. Rs. 40,000 crores is a big amount for developing nation like India that strives to make value for every hard-earned penny.
The 40,000-crore-scame that we’ve mentioned here is the infamous Barmer refinery project proposed by former Rajasthan chief minister Mr. Ashok Gehlot! The world may praise him for his visionary ideas, but the reality was totally different from what was projected by Rajasthan Congress.
How Gehlot Government Crafted the Cleverest Scams Of all Times, Right Under Our Noses!
In his election year that is 2013, former Rajasthan CM, backed by Congress President Sonia Gandhi signed a joint MoU with Hindustan Petroleum Corporation (HPCL) to set up Barmer refinery with 9-million-ton manufacturing capacity. The refinery was worth Rs. 372.1 billion crore and promised lucrative earning and job opportunities to 4 lakh natives in Rajasthan.
After evaluating the terms and conditions of Barmer Refinery project, Raje-led BJP government criticized Congress for signing an MoU that was totally futile for Rajasthan. Further investigations revealed that Gehlot government agreed to offer a loan worth Rs 3736 crores/year to HPCL for 15 years. The peculiar thing was this loan was interest-free! It means, the government was about to pay 56,040 crores for free! Not only this, they also proposed a loan amount worth Rs 560 billion as equity. In return, they demanded just 26% share in company profit, which seemed not just absurd but downright harmful for state economy.
Now, the question arises that why did Congress agree to such absurd conditions set by the HPCL, when they could’ve demanded a better share. Bhatinda refinery, a profitable venture for Punjab government was an ideal refinery model set up by the same company (HPCL) that was the sole beneficiary in this deal. Quoting it as an example, Raje questioned Congress that why should Rajasthan bear the additional fiscal burden of this refinery when every newborn already has a loan of Rs 30,000 on his head—all thanks to the DISCOM mismanagement, yet another epic failure of Gehlot government.
The state was leasing its land natural resources and charging just 50% excise duty on Barmer refinery. In this condition, the Barmer refinery deal seemed entirely shady! Therefore, with the shift in power from Congress to BJP, CM Vasundhara Raje had a face-to-face meeting with HPCL officials, urging them to bring down Internal Rate of Return (IRR) from 15% to 12%.
As opposed to exorbitant loan offered earlier, Raje government agreed to offer just Rs 16,845 crore as loan amount. Here, they successfully managed to save Rs. 40,000 crores—the hard-earned money of Rajasthan people. Also, the Congress initially planned to build up a refinery at Lelaana. The lands allotted for refinery at Lelaana were illegally allotted to builders (like in the case of Robert Vadra). However, due to public pressure, they dropped this idea and shifted their focus on Barmer, perhaps because they wanted a share in Barmer’s land too.
Had this project been developed under Gehlot government, Rajasthan would’ve suffered tremendous fiscal pressure. Who knows where they would’ve utilized the funds sanctioned as loans? With Raje taking charge of Barmer refinery project, it turned out to be a profitable venture for Rajasthan public. When the refinery starts its operations in next 5 years, Rajasthan will surely benefit from Raje’s visionary efforts.
