The Great Corporate Cleanse at massive Rs 7.7 lakh crores cost,
Bad Loans Vanish + massive incentives
In just five years, if India’s public sector banks have wiped out Rs 3,18,324 crore of toxic loans belonging to large industries off their books, the corporates quietly pocketed another Rs. 4,53,329 crores in tax incentives – a staggering combined bonanza of over Rs 7.7 lakh crore.
According to official data available, the peak of the write-off was in 2020-21 when banks written off a jaw-dropping Rs 90,641 crore in a single year. Year after year, this is happening, Rs 57,541 crore (2021-22), Rs 72,108 crore (2022-23), Rs 58,359 crore (2023-24). Even during the financial year 2024-25, Rs 39,675 crore (provisional) has disappeared from balance sheets.
According to official data available, the peak of the write-off was in 2020-21 when banks written off a jaw-dropping Rs 90,641 crore in a single year. Year after year, this is happening, Rs 57,541 crore (2021-22), Rs 72,108 crore (2022-23), Rs 58,359 crore (2023-24). Even during the financial year 2024-25, Rs 39,675 crore (provisional) has disappeared from balance sheets.
The Government insists these are mere “technical write-offs” – not waivers. Borrowers remain liable, and banks continue chasing dues through courts, SARFAESI, and IBC. Yet, the data shows that in the best year so far (2024-25), banks managed to recover only 46.64% of the amount written off during that very year. In 2020-21, the recovery rate dropped to a dismal 18.58%,
Meanwhile, corporate tax breaks flowed like clockwork. Rs 94,110 crore (2019-20), Rs. 75,218 crore (2020-21), Rs 96,892 crore (2021-22), Rs 88,109 crore (2022-23), and a fresh high of 98,999 crore in 2023-24, almost 1 lakh crore in a single year handed back to corporate through various deductions and exemptions.
The Ministry of Finance points to brighter spots, gross NPAs of public sector banks have crashed from 9.11% in March 2021 to a provisional 2.58% in March 2025, and fresh bad loans are at a record low. But the sheer scale of loans vanishing from books, coupled with near Rs 1 lakh crore annual tax gifts, has reignited questions about who ultimately pays the price when large borrowers default in thousands of crores while small farmers and home-loan borrowers face attachment orders for defaults running into lakhs.
The Ministry says write-offs do not benefit the borrower, however, the numbers, , tell a different story on the ground.
| Loans written-off by Public Sector Banks | |
| Year | Amount * |
| 2020-21 | 90,641 |
| 2021-22 | 57,541 |
| 2022-23 | 72,108 |
| 2023-24 | 58,359 |
| 2024-25# | 39,675 |
| * Amounts in crore Rs. | |
| # Provisional | |
| Major Tax Incentives for Corporate Taxpayers | |
| Year | Amount* |
| 2019-20 | 94,109.83 |
| 2020-21 | 75,218.02 |
| 2021-22 | 96,892.39 |
| 2022-23 | 88,109.27 |
| 2023-24 | 98,999.57 |
| * Amounts in crore Rs. | |
