Stealing from RBI won’t work, says Rahul; Sitharaman asks Opp to seek ex-FMs’ counsel
The Opposition and the Government are locked in a bitter slugfest over the Reserve Bank of India’s decision to give Rs 1.76 lakh crore of its surplus to the Centre, a move that has invited criticism from several quarters.
The Congress on Tuesday accused the Modi Government of driving the country to brink of bankruptcy, imposing a financial emergency, and stealing RBI’s money.
Finance Minister Nirmala Sitharaman was quick to hit back, saying she did not care about such charges and the Opposition leader should have spoken to former Finance Ministers from his party before hurling such charges.
Left parties too hit out at the Centre alleging the Government had “appropriated” 99 per cent of the profits of India’s central banking institution since 2014. It called upon all Communist party units in the country to organise protests against this “merciless assault” on the economy and people’s livelihood.
Congress leaders, including Rahul Gandhi, Anand Sharma, Jairam Ramesh, mounted attack on the Government’s move to take cash from the RBI.
“When you strip the RBI of its reserves you’re leaving the Reserve Bank vulnerable to a series of disasters. The contingency fund is for emergency situations, not to cover up for the Govt’s economic failures,” the grand old party said on its Twitter handle.
Rahul said Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman are “clueless” about solving the “self created economic disaster” and accused them of “stealing money” from the bank. “Stealing from RBI won’t work — it’s like stealing a Band-Aid from the dispensary and sticking it on a gunshot wound,” he tweeted, using the hashtag “RBILooted”.
While Sharma demanded a white paper from the Government on the state of the Indian economy within a week, his colleague Ramesh recalled how former RBI Governor Urjit Patel and Deputy Governor Viral Acharya were forced to leave the RBI.
Sharma sought data on projects underway and investments in public and private sectors together with the actual factory output. The former Commerce Minister also demanded a report on the country’s export scenario and the credit off-take by Micro, Small and Medium Enterprises (MSMEs), and the agriculture sector within two weeks.
According to the former Union Minister, the difference in revenue between the Government Budget and economic survey is Rs 1.7 lakh crore and the dispensation has taken away Rs 1.76 lakh crore from the Central bank. “The Government made wrong Budget, it’s in loss. That’s why they snatched RBI’s money and pushed the country towards an economic emergency,” Sharma said at AICC Press conference. “It is a catastrophic decision. The Government has done it out of sheer desperation. Its follies have brought the Indian economy to ruins,” said the former Commerce Minister.
Sharma said the RBI now has no money to tackle any economic eventuality as it cannot go below the benchmark 5.5 per cent reserves, going by the global economic crisis that various countries are faced with. A politburo statement said the RBI was a “lender of the last resort” and condemned the manner in which its reserves were being utilised.
“Since 2014, the Modi Government has appropriated 99 per cent of RBI’s profits every year to fund its propaganda campaigns. It has now siphoned off Rs 1.76 lakh crore ostensibly to recapitalise banks which have been looted by Modi’s cronies. The health of our leading navaratnas in the public sector is badly damaged by both, falling demand and because of the financial burden imposed on them by the govt. Siphoning off huge dividends. All sections, farmers, workers, MSMEs, youth and women workers have been hurt badly,” CPIM general secretary Sitaram Yechury said in a tweet.
Reacting to the charges, Sitharaman said, “The Congress should have consulted its Finance Minister and seniors before making these allegations regarding the RBI. Yet, they have become consummate in making such allegations of stealing and I do not want to pay much heed to this,” she said told on the sidelines of GST meeting.
Sitharaman also said questioning the credibility of the RBI, which had constituted the Bimal Jalan committee on determining the excess capital, is a “worrying” sign.
The committee had eminent people on it and making any allegations like this is “outlandish”, Sitharaman said.
“Any suggestion on the credibility of RBI seems a bit outlandish considering the committee was appointed by the RBI itself,” she said, adding the Government has not decided how to use the windfall from the RBI.
According to some experts, the Government has accounted for Rs 90,000 crore surplus from RBI in the budget and the money can be used to prop up the sagging growth.
At the time of the constitution of the Jalan panel, former chief economic advisor Arvind Subramanian had said the money should be used for specific purposes like bank recapitalisation.
The excess capital was one of the key issues which had led to the resignation of former Governor Urjit Patel in December, and his deputy Viral Acharya in last month, had voiced concerns on the Government raiding the balance sheet of the central bank.