Scrapping of 80:20 scheme enabled Nirav, Choksi to make 200% profits: Cong

Indian jeweller Nirav Modi poses during the launch of his store in Mumbai | Photo: Reuters
The Congress on Thursday accused the Modi government of giving "largesse" to beleaguered diamond merchants Nirav Modi and Mehul Choksi and helping them make "windfall profits" by abolishing the '80:20 gold import scheme'.

Congress communications in-charge Randeep Surjewala claimed that the Modi government lifted all restrictions on gold import on November 28, 2014, that helped increase the turnover and profits of Mehul Choksi's companies by 200 per cent.

In view of "pressure in the current account" due to huge imports of gold and crude oil, the UPA government had in 2013 imposed restrictions on import of gold and made it mandatory to export 20 per cent of imported gold after value addition under the 80:20 scheme.

The BJP earlier claimed that the gold import scheme was introduced to "favour" private entities.

Hitting back at the BJP, Surjewala asked Law Minister Ravi Shankar Prasad if he considered the scheme a "scam" and whether he would recommend registration of a case against BJP leader and Defence Minister Nirmala Sitharaman who, as commerce minister in the Modi government, justified the scheme as well as import of gold by "star trading houses" in Parliament.

"Modi government's largesse to Nirav Modi and Mehul Choksi by abolishing '80:20 Gold Import Scheme' that enabled them to make windfall profits of 200 percent.

"Did the abolishing of 'Gold Import Scheme 80:20' not lead to free and unchecked import of Gold by the likes of Nirav Modi and Mehul Choksi? Did it not lead to sudden turnaround in fortunes of their companies from losses to profits to the extent of 200 pc?" he told reporters.

Nirav Modi and Choksi are accused of defrauding Punjab National Bank to the tune of Rs 126.36 billion.

He said Choksi's company's profits went up to Rs 188.6 million in 2014-15, against a loss of Rs 226.5 crore the previous year and the jeweller himself admitted in the annual report about the "slowdown" due to the gold import scheme.

Accusing the BJP of speaking "downright lies, deliberate falsehood and desperate diversion", he said it is like the "pot is calling the kettle black".

"Modi Government and Law Minister Ravi Shankar Prasad have been peddling white lies and deliberate falsehood in their sinister game to befool the people on the 80:20 gold import scheme and divert attention from their tacit complicity in the fleece and fly scheme of 'Chhotta Modi 2 i.e Nirav Modi' and 'hamare' Mehul Choksi'.

"The truth is 'benefactors of gold importers' are crying 'thief' to cover up their misdeeds," he alleged.

Sujewala asked Prime Minister Narendra Modi if the gold scheme checked unregulated import of gold, saved precious foreign exchange and institutionalise the bullion trade. He also asked whether the scheme helped in reducing current account deficit from 4.8 per cent in 2012-13 to 1.7 per cent in 2013-14.

"If the gold import scheme 80:20 is a scam as professed by Ravi Shankar Prasad, will he ask the PM to register an FIR against the then Commerce Minister Nirmala Sitharaman for justifying and validating the 'Gold Import Scheme' both inside and outside Parliament?.

"Will Union Law Minister seek resignation of the then Union Commerce Minister for validating '80:20 Gold Import Scheme?" he asked.

The Congress leader also questioned the prime minister's silence on the issue.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel