July 14,2014: The BJP’s Narendra Modi-led Central Government has decided to penalize Reliance Industries for producing less than targeted natural gas from KG-D6 block. The Oil Minister Dharmendra Pradhan said that Reliance India Limited (RIL) has been slapped with a new fine of  Rs.3,500 crore  ( USD 579 million). Interestingly, if you calculate such penalties in last 4 years for RIL, it stands at a towering amount of  Rs.14,300 crore (USD 2.376 billion). This has prompted Aam Aadmi Party (AAP) to urge the government to simply shunt Reliance out. AAP’s argument is that RIL has committed so many defaults that there is a strong basis for the government to now scrap the contract. 

However, on the contrary, is not Modi government shielding Reliance?

In June of this year, Anti-Corruption Branch of Delhi issued notice asking if any penalty had been imposed for underproduction of gas. This question becomes much more relevant since a hearing in Delhi high court is due on 1st August on the basis of FIR lodged by AAP Government (in Delhi) in February,2014 against Reliance Industries.

The penalty that has been imposed today may  just be a PLOY of Modi Government to withdraw the FIR against Reliance Industries. It is time that the Modi acts tough against erring companies and sends a signal that his government means business. Acting soft on such matters gives an impression that Mr. Modi is not able to crush crony-capitalists. 

The press statement of Aam Aadmi Party in this regard can be accessed via this link.