In spite of he above exposure IDBI went ahead and sanctioned a package for Rs. 1080 crore for six of the aforesaid 14 companies. This is in turn to be followed by IFCI and ICICCI and thus an estimated amount of Rs. 5000 crores and odd is being doled out as an additional bonanza to these private corporate to complete their steel projects.

This steal deal or steel scam, whatever you call it, had brought to the fore open corporate war within the Vajpayee Government. In February'99 Shri Mohan Guruswamy, the then Member of National Executive of BJP and Adviser to the Financial Minister, who as per the Finance Minister, was sacked for favouring certain steel firms like ESSAR and for needling in the affairs of Financial Institutions (Economic Times, March 6'99). Guruswami, in turn, alleged that Promod Mahajan, Information Minister, backed by the PMO, had influenced in extending similar favour to the Mittal Group, another corporate involved in the steel-projects. Out of the hullaballoo about the division of BJP Minister in pro-Essar, Pro-Mittal, Pro-Reliance and other Corporate Groups, the following startling revelations emerged :

1. In the name of achieving all-round development in the Steel Industry, Financial Institutions (FIS) showed eagerness to help 14 private entrepreneurs and against an estimated investment of Rs. 24,000 crore, an amount of Rs. 17,000 crore was provided by the FIS as loan. Interestingly, the Firms, which were favoured with such loan by the FIS, such as Ispat Industries, Ispat Metalic Industries Ltd., Usha Ispat Ltd., Jindal Vijaynagar Ltd., S.J.K. Steel Corpn. Ltd. & Essar Steel Ltd., were not having any experience and expertise for running such big steel plants in the country.
2. FIS, who had shown a positive approach towards private steel firms and did not hesitate to sanction a colossal amount of Rs. 17,000 crore as loan in their favour, have expressed reluctance to extend any financial assistance for modernisation and revival of public sector steel plants under SAIL. IISCO's is a glaring instance which, despite its high potentiality, is being allowed to limp for years together in absence of modernisation at an investment of nearly Rs. 2000 crore.
3. These Industrialists are quite aware of various unscrupulous ways and tactics of enjoying all sorts of relief's and concessions extended by the Govt. and in this case also, in the pretext of exporting the steel, they enjoyed heavy rebate on Import Duty while importing machinery and equipment's.
4. Project costs of all the aforesaid plants were camouflaged to show at a much higher side with the sole intention of either diverting the funds to other projects or siphoning off the exaggerated amount purely for personal gain.
5. None of these projects could be completed within the stipulated period, resulting in further increase of project cost, cost of production apart from more loss on export.
6. As one-third of the capital was siphoned off front by these entrepreneurs the loan amount as well as the fund invested by the promoters were exhausted much before the completion of the projects.

It is no wonder therefore these corporate groups after-being bailed out through a 5000 crores package would come to the rescue of the caretaker Government with a motivated campaign that budgetary policies of this Government must be followed without any change. It is not the steel corporate alone. The unusual concession given to Enron and Hinduias in the Power Sector, to the fertilizer giants in the subsidy scam through manipulation of nameplate capacities, to the private operators in the Telecom sector, reported decision of handing over the IOC oil pipelines to private corporates etc. have led to an atmosphere that the Indian corporate world for the first time in the post-independent India had the audacity to throw an ultimatum to the political parties that they should follow the economic agenda formulated by the Confederation of Indian Industry (CII) as a condition for getting any contribution/fund for the coming election. The corporate world is bent on making a martyr of Vajpayee, which should not surprised the Indian people as it is a quid-pro-quoposition between BJP and the corporate world. The 'steel deal' confirms the same. A bail-out package for the corporate offenders leads to a bail-out package for the lame duck Vajpayee Government, totally at the mercy of the corporate world and the multinationls.