Questioning the "business model" of long-grounded Kingfisher Airlines for Vijay Mallya's mounting woes, Finance Minister Arun Jaitley has said the airline sector as such is doing well in India with many carriers making good profits.
Mallya, the owner of Kingfisher Airlines and many other companies that owe over Rs 9,000 crore of dues to lenders, is currently in London, defying Enforcement Directorate (ED) summons.
"I am not giving a final opinion on it. It could be attributed to the business model of a particular company," Jaitley yesterday said here in response to a question on Mallya, on which he refused to be directly dragged into.
"As far as the recoveries are concerned, in this (Mallya) case, banks are taking all possible steps. And whether there have been violations of some penal provisions, the investigating agencies are looking at it," he said.
A non-bailable warrant has been issued against Mallya after he refused to return to India to appear before the ED on three different occasions on investigations related to a money laundering case against him.
Jaitley said his own understanding of the NPA (non- performing asset) situation is that most of it is related to business failure in certain specific sectors of the industry.
"If you analyse the quantum of NPAs, they represent about five or six sectors steel, power, somewhat in textiles, highways, infrastructure, there are a few of them in sugar. In addition to these there are individual companies that have done badly," he said.
Some loans might have been given without adequate due diligence principles, he acknowledged.
"Airlines problem is not sectoral, for the simple reason that most of the other airlines lasted the challenging period, turned around and are making profits. In steel, across the board sector was suffering, highways is a sector where everybody was suffering.
"These are all sectoral reasons, sectors where you have to address the sector, where the sector would revive and the bad loans become performing loans," he said.
Jaitley said banks and other investigating agencies would act independently and take their own decision.
"The banks have to take a prudent decision based on their banking. The government did not ask the banks to sanction the loan. The banks (even if it is a government-owned) would have to take a decision" based on their commercial considerations, he said in response to a question.
The Finance Minister is currently on a week-long tour of the US primarily to attend the annual Spring meeting of the International Monetary Fund and the World Bank.