Rahul Gandhi Criticizes Modi Government Over NCLT Settlement for Subhash Chandra

New Delhi, India Aug 28, 2026 ALN: Congress leader Rahul Gandhi on Thursday accused the Narendra Modi government of fostering a system of inequality in India, where the wealthy benefit at the expense of the common citizen. His remarks came after the Company Law Tribunal (NCLT) approved a resolution plan allowing businessman Subhash Chandra to settle ₹22,006 crore in dues for just ₹6.5 crore. This decision has ignited a political firestorm, as it raises questions about the fairness and effectiveness of India's insolvency laws and the broader economic policies that govern the country.

In a post on X, Mr. Gandhi sarcastically suggested that NCLT stood for “Neta-Company Loot Tribunal.” His comments underscore a growing sentiment among critics who believe that the Indian government is increasingly favoring wealthy industrialists while neglecting the needs and rights of ordinary citizens. He highlighted the disparity in treatment between the affluent and ordinary citizens, stating, “If a farmer doesn’t pay 50 thousand, his land gets auctioned off. If a salaried person misses even one EMI, bank goons show up at the house. Poor students can’t even get loans for education.” This comparison illustrates how the consequences of financial mismanagement are disproportionately borne by the lower and middle classes, while the wealthy appear to evade similar repercussions.

Mr. Gandhi further criticized the government, saying, “But for select ‘friends,’ bank money is like personal property — withdraw as much as you want, repay whatever you feel like.” His statement reflects a broader narrative that has been gaining traction in Indian politics, where the ruling party is accused of creating an economy that benefits a select few at the expense of the majority. Mr. Gandhi's remarks resonate with many citizens who feel that the economic policies of the Modi administration have not translated into equitable growth or opportunities for the average Indian.

The NCLT's approval of the repayment plan means that Mr. Chandra can pay ₹6.5 crore against admitted creditor claims of ₹22,006.57 crore in his personal insolvency resolution process, resulting in a staggering haircut of nearly 99.97% for lenders. This significant reduction in the amount owed has raised eyebrows among financial analysts and lawmakers alike, leading to questions about the integrity of the insolvency process and the protective measures in place for creditors. A haircut of this magnitude is unprecedented and suggests a potential loophole in the legal framework that governs insolvency proceedings in India.

Reactions from Congress Leaders

Other Congress leaders echoed Mr. Gandhi's sentiments. General Secretary Jairam Ramesh described the settlement as “not just a haircut” but a “mundan,” asserting that it makes “a completely mockery of the Insolvency and Bankruptcy Code, 2016.” The Insolvency and Bankruptcy Code was enacted to streamline the process of resolving corporate insolvencies and to protect the interests of creditors while allowing businesses a chance to recover. However, critics argue that cases like Mr. Chandra's undermine the very principles that the code was designed to uphold.

Mr. Ramesh explained that in financial terms, a haircut refers to the difference expressed as a percentage when creditors are owed money and the debtor repays only a portion of it. This concept is crucial for understanding the implications of the NCLT's decision, as it raises concerns about the potential for abuse of the insolvency process. If high-profile individuals can escape significant debts with minimal repayment, it sets a troubling precedent that may encourage further reckless financial behavior among the wealthy.

General Secretary Randeep Singh Surjewala also criticized the settlement, alleging that such arrangements amount to “loan waivers for industrialists disguised as haircuts.” His comments highlight a growing frustration among the public and opposition parties regarding perceived preferential treatment for wealthy business owners. He questioned the rationale behind having NCLT proceedings if haircuts can reach percentages as high as 99%. This skepticism reflects a broader concern that the insolvency framework may be failing to serve its intended purpose of ensuring accountability and fairness in the financial system.

Mr. Surjewala demanded that the Finance Minister disclose how much banks have lost through haircuts under NCLT proceedings over the past 12 years, estimating the figure could be “upwards of ₹10 lakh crore.” This estimate, if accurate, would indicate a significant financial burden on the banking sector, which could ultimately impact taxpayers and the economy as a whole. The demand for transparency in the financial losses incurred by banks is indicative of a larger call for accountability within the banking system, especially in light of the recent controversies surrounding large corporate defaults.

In conclusion, the NCLT's decision has sparked significant backlash from Congress leaders, who argue that it highlights the systemic inequalities in India's financial and legal frameworks, favoring the wealthy while neglecting the struggles of ordinary citizens. The implications of this case extend beyond the immediate financial loss to creditors; it raises fundamental questions about the integrity of the insolvency process, the role of government in regulating financial markets, and the broader socio-economic landscape in India. As the debate continues, it remains to be seen how the government will respond to these criticisms and what reforms, if any, will be implemented to address the concerns raised by opposition leaders and the public.