Congress president Rahul Gandhi on Saturday accused Prime Minister Narendra Modi of "weakening" the Hindustan Aeronautics Limited (HAL) to help his "suit-boot" friend.

His allegation came after a media report claimed that the defence public sector undertaking (PSU) HAL, grappling with low finances, for the first time in years, has been forced to borrow money to pay salaries to its employees.

"(That) HAL does not have money to even pay salaries should not come as a surprise to anyone," Gandhi said in a Facebook post in Hindi. Rafale had been taken away from HAL, and "now to complete the job, the suit-boot friend needs people who are in HAL. Without weakening HAL, this work cannot be done?" he said. "Chowkidar (watchman)" is being true to his friendship, "he has nothing to do with the country's good or bad", he said. The friendship should continue, the Congress chief said. 

Earlier, Congress leaders accused the Modi government of "squandering" the assets of public sector undertakings such as HAL and ONGC to "favour a select few". "HAL is borrowing Rs 1000 crore because it can't even pay salaries?" senior Congress leader Ahmed Patel tweeted.

"Not just HAL; be it ONGC, LIC, HPCL, GSPC or any other PSU, this government has squandered their assets to favour a select few," Patel alleged.

Citing the media report, Congress chief spokesperson Randeep Surjewala said, "Under Modiji, India's largest public sector defence unit, HAL, does not even have enough cash to pay salaries to its employees.

For the first time in 70 years, they were forced to borrow Rs 1000 crore". "Despite that, no Rafale contract for them; apathetic!" he tweeted.

The Congress has been alleging that the government favoured a private company over HAL in the Rafale jet deal.

The government, as well as the company have rejected all such allegations