Cong says Centre "stole" from RBI, Nirmala hits back

Cong says Centre "stole" from RBI, Nirmala hits back

Finance Minister Nirmala Sitharaman on Tuesday said the Congress leader should have had consulted his own past finance ministers before levelling such charges. (Photo by Prem Singh / AFP)

The Congress party on Tuesday slammed the Modi government for the “unprecedented economic crisis” and said that “stealing from the RBI” will not work as it was akin to sticking a band-aid on a gunshot wound.

With former finance minister P Chidambaram in CBI custody, senior Congress leaders Rahul Gandhi, Jairam Ramesh, and Anand Sharma took on the Modi government on the economic slowdown.

“PM and FM are clueless about how to solve their self created economic disaster. Stealing from RBI won't work – it's like stealing a Band-Aid from the dispensary and sticking it on a gunshot wound,” Rahul said on Twitter.

Ramesh described the RBI's record cash transfer to the Centre as a “raid” on the central bank and claimed that it was a one-time bonanza to “cover-up fiscal deficit”.

“RBI will have inadequate cash to deal with any financial crisis,” Ramesh, a former Union minister, said.

Sharma demanded that the government bring out a white paper on the state of Indian economy within a week and release data on projects underway and investments in public and private sectors together with the actual factory output.

Sharma said the cash transfer has affected the RBI's Contingency Reserves and the central bank may now find it difficult to respond to financial crises.

“So tomorrow if you have a global financial crash, a global economic crisis, Reserve Bank of India has no room left to intervene and to help the Indian economy,” Sharma, a former Union Commerce, and Industry minister, said.

CPM strongly disapproved the manner in which the RBI's reserves were being sought to be utilised to meet the fiscal deficit.

'Consult your own ex-FMS'

Finance Minister Nirmala Sitharaman on Tuesday said the Congress leader should have had consulted his own past finance ministers before levelling such charges.

"The Congress should have consulted its own finance ministers and senior leaders before making these allegations regarding the RBI. They have become an expert in making such allegations of stealing and I do not want to pay much heed to this," she told reporters in Pune.

She added it is "outlandish" to question the credibility of the Reserve Bank which had formed the Bimal Jalan panel with eminent experts, and also "worrying" if questions are raised against the panel.

On the former RBI governor Raghuram Rajan's comments in December 2018 on the likelihood of the RBI's rating getting downgraded if its excess capital is carved out, Sitharaman said the Jalan panel was appointed by the RBI itself, with eminent experts and met several times before arriving at its conclusion.