The Congress has demanded a probe into the alleged role of Narendra Modi in “gifting” the GIFT City project as Gujarat chief minister to IL&FS, the infrastructure lending major whose debt defaults have triggered panic in the stock market.

“…After the project failure, SBI & LIC are being used to pump in money to save the IL&FS. This is a classic case of financial scam management,” Congress spokesperson Gourav Vallabh said at a news conference on Saturday.

“Will Prime Minister Narendra Modi who exuded such great virtues of the GIFT City project take responsibility for this debacle? There is a serious need for probing Modi’s role when he was the chief minister of Gujarat,” Vallabh added.

Vallabh described GIFT City — a smart city project in Gujarat — as Modi’s pet project.

The Congress said Modi’s and finance minister Arun Jaitley’s mismanagement of the financial sector would cause irreparable damage to the economy.

The default on payments by IL&FS triggered a panic in stock markets as many mutual fund houses and financial entities are believed to have invested heavily in the debt instruments of the company. On September 21, the Sensex dived almost 1000 points in intra-day trade on the back of worry about IL&FS.

Vallabh said the proposed bailout by Life Insurance Corporation and State Bank of India is a classic example of how the government is forcing public-held companies to pilfer the common man’s money.

LIC, a principal investor in the company, is believed to have agreed to subscribe to a proposed Rs 4,500 crore rights issue as part of the turnaround strategy. Sources said SBI, another shareholder, could also subscribe to it. (See Business)

“Whose interest will it serve?” Vallabh asked, pointing out that foreign shareholders own 36 per cent stake. “Why is the government jeopardising the savings of 38 crore LIC holders and crores of SBI depositors?”