NEW DELHI — Congress leader and Leader of Opposition in the Lok Sabha Rahul Gandhi has accused the Narendra Modi government of creating what he called “two systems” in India, alleging that ordinary borrowers face harsh consequences while influential corporate borrowers receive more favourable treatment.
Gandhi made the remarks on Thursday while criticizing the functioning of the National Company Law Tribunal (NCLT), a statutory body that handles corporate insolvency, restructuring and related disputes.
In a post on X, Gandhi contrasted the treatment of farmers, salaried employees and students with what he described as preferential treatment for a small group of wealthy businesspeople.
He alleged that a farmer unable to repay a relatively small loan could face the auction of land, while salaried borrowers who miss even one instalment can face aggressive recovery measures. He also pointed to difficulties faced by students seeking education loans.
Gandhi then accused the government of allowing certain powerful business interests to treat bank funds as though they were personal money. He described the alleged disparity as evidence of an unequal financial system.
NCLT comes under political scrutiny
The Congress leader's criticism focused on an NCLT insolvency proceeding involving Essel Group chairman Subhash Chandra.
Gandhi used the controversy to question whether the country's insolvency system applies the same standards to ordinary citizens and major corporate figures. He also used a sharp political description for the tribunal, calling it the “Leader-Company Loot Tribunal.”
The remarks have placed the NCLT and India's corporate insolvency framework at the centre of a fresh political dispute between the Congress and the BJP-led government.
The NCLT was established to deal with company-law matters and insolvency proceedings. Its decisions can have major consequences for lenders, borrowers, shareholders and creditors involved in financially distressed companies.
Subhash Chandra disputes claims
Chandra has rejected what he described as misleading interpretations of the insolvency proceedings.
In a statement issued Thursday, he said reports about his personal insolvency case had presented an inaccurate picture of the amounts involved. Chandra stressed that he was a personal guarantor for loans taken by companies associated with the Essel Group and had not personally borrowed the money from lenders.
According to Chandra's statement, lenders filed claims worth approximately Rs 22,006 crore, of which about Rs 21,696 crore had been admitted.
However, he said the claims of lenders who objected to his repayment plan amounted to about Rs 3,992 crore. Of that amount, he said Rs 620 crore had already been settled, leaving approximately Rs 3,372 crore.
Chandra argued that the total claims filed during the proceedings should not be treated as the amount currently outstanding.
Insolvency case becomes political flashpoint
The dispute stems from insolvency proceedings connected to guarantees provided by Chandra for loans taken by companies associated with the Essel Group.
Chandra said many of the guarantees were provided after January 2019, when the group had already encountered financial difficulties. He maintained that the borrowing companies had assured him that the loans would be repaid.
The case reached the NCLT after lenders pursued insolvency proceedings against Chandra as a personal guarantor.
A difference of opinion between two members of the tribunal resulted in the matter being referred to a third member. The third member subsequently held that Chandra's repayment plan satisfied the requirements for approval under the Insolvency and Bankruptcy Code and that objections raised by creditors did not provide sufficient grounds to reject it.
Gandhi expands attack on Modi government
Gandhi's comments are part of a broader Congress campaign accusing the Modi government of favouring large corporate interests.
The opposition party has repeatedly argued that economic policies under the BJP-led government have disproportionately benefited major businesses while ordinary Indians face pressure from inflation, debt and employment challenges.
The government and BJP have rejected such accusations in the past, maintaining that their policies are intended to promote investment, economic growth and financial inclusion.
The latest NCLT controversy gives the opposition another opportunity to raise questions about economic inequality and the treatment of borrowers.
Debate over fairness of financial institutions
At the heart of Gandhi's criticism is a broader question about whether India's financial and insolvency institutions treat different categories of borrowers equally.
For ordinary borrowers, loan defaults can result in significant financial and legal consequences. Corporate insolvency proceedings, meanwhile, operate through a structured legal framework designed to balance the interests of debtors and creditors while providing a mechanism for resolving financial distress.
Supporters of the insolvency system argue that corporate restructuring and repayment plans are necessary to recover money for creditors and prevent distressed businesses from collapsing unnecessarily.
Critics, however, contend that the process can appear unfair when large borrowers receive opportunities to restructure liabilities that are rarely available to ordinary citizens.
Gandhi is seeking to turn that perception into a broader political argument against the Modi government.
Political battle likely to continue
The controversy is unlikely to end with the latest exchange.
For the Congress, the NCLT case provides an opportunity to frame the government's economic policies around inequality and alleged preferential treatment of powerful business interests.
For the government, the issue is likely to remain a matter for the independent legal and insolvency framework rather than political intervention.
The dispute also highlights the increasingly important role of the NCLT in India's financial system. As corporate debt and insolvency cases become more complex, decisions by the tribunal can affect billions of rupees and thousands of employees, lenders and investors.
Gandhi's allegation of “two systems” has therefore turned a complicated insolvency proceeding into a wider political debate over economic fairness.
Whether the controversy gains traction among voters will depend largely on how the competing claims about the NCLT proceedings, creditor recovery and treatment of borrowers are understood by the public.
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