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RBI bonanza: Opposition cries foul

Our Bureau New Delhi | Updated on September 26, 2019 Published on August 27, 2019

Rahul Gandhi   -  File photo: THE HINDU

PM, FM clueless over handling of economy, says Congress

The Opposition parties came down heavily on the Centre over the RBI’s decision to handover ₹1.76-lakh crore from the Reserve Bank of India’s reserves to the government.

The Congress said Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman are clueless about how to solve the “self-created” economic disaster. The CPI(M) alleged that the Modi government has siphoned off 99.99 per cent of the RBI’s net profits every year.

“Stealing from RBI won’t work — it’s like stealing a Band-Aid from the dispensary & sticking it on a gunshot wound,” said former Congress President Rahul Gandhi in Twitter.

The party’s deputy leader in Rajya Sabha Anand Sharma said the country is in a deep financial crisis. “The economy is in shambles, all indicators of development are low. India’s GDP is continuously falling. The last quarter showed a GDP growth of 5.8 per cent. The current financial year’s first quarter, for which final figures will be out on August 30, is projected to be at 5.6 per cent, the least in the last 7 years,” Sharma told reporters here on Tuesday.

He said the country’s index of industrial production is at two per cent and for manufacturing it is 1.2 per cent.

“The rupee has lost four per cent of its value and is currently Asia’s worst performing currency. Unemployment is at 8.2 per cent, while in reality it is more than 20 per cent. Any economist can verify that. Industries are in danger, be it automobile sector or others. People are not even getting loans and hence demand is low,” he added.

Risk buffer

He said it was the Centre that decided to transfer RBI’s excess, known as Contingency Risk Buffer, to itself. “No central bank hands over its risk buffer to government. But RBI, on recommendation of Jalan committee, decided to hand over ₹1.76 lakh crore to the government in one go,” he said and added that the Jalan committee, had earlier said that it will be transferred to the government in instalments over a period of 4-5 years. “Instead it was given in one go. This confirms India’s deep economic and financial crisis,” he said.

The former Commerce Minister said the difference between Budget and Economic Survey was huge. “In this year’s Budget, based on revised estimates, revenue estimate is ₹17.3-lakh crore while Economic Survey pegs it at ₹15.6 lakh crore, the difference is ₹1.7-lakh crore.

This difference has been taken from the RBI. The government’s Budget projections are wrong. That’s why they snatched RBI’s money and pushed the country towards an economic emergency, he claimed.

CPI(M) General Secretary Sitaram Yechury disapproved of the manner in which the RBI’s reserves are being sought to be utilised to meet the fiscal deficit. “Similarly, in the past, profit making public sector navaratnas like ONGC had been fleeced to meet the Modi government’s extravagant expenditureThe RBI is the monitoring authority and lender of the last resort. Its financial stability is the insurance to protect our economy from monetary or financial instability or crisis generated globally,” the CPI(M) leader said.

Published on August 27, 2019
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