New Delhi: Finance Minister Arun Jaitley on Saturday claimed that the government does not need any extra funds from the Reserve Bank of India (RBI) or any other institution to meet the fiscal deficit target. However, he also added that the extra funds, which may accrue from the new capital framework of the RBI, can always be used for poverty alleviation programmes over the years by future governments. Notably, India’s fiscal deficit is slated to come down to 3.3 per cent of GDP at the end of the current fiscal.

“We don’t need any extra funds from any other institution to finance our fiscal deficit. Let’s be very clear that’s not the intention of the government. And we are not saying that in next six months give me some money. I don’t need it,” the minister said in an interview to a TV channel.

The Finance Minister, while responding to criticism that the government was eyeing RBI’s reserves, said globally central banks have a capital framework which determines the amount of funds that ought to be maintained as reserves. “All we are saying is there has to be some discussion and some norms under which Reserve Bank will have a capital framework,” he said.

Earlier this month, the RBI board at its meeting decided to set up a high-level committee for examining the Economic Capital Framework (ECF) to determine the appropriate levels of reserve the central bank should hold. The RBI is reported to be holding a massive Rs 9.59 lakh crore of reserves.

Jaitley also answered questions with regard to the autonomy of the Reserve Bank. “The government’s viewpoint is that we respect and we will always maintain the autonomy within the framework of the laws which have been laid down,” he said.

Adding that there is no institutional failure, the minister said, “If there are sectors of economy which are starved of liquidity or credit, as a sovereign government… We certainly will flag those issues wherever the RBI has the authority to decide certain things.”

Targeting the Congress, he said that during the UPA regime, fiscal deficit went as high as 6 per cent of the GDP. “We inherited a 4.6 per cent fiscal deficit. This government since 1947 in five-year tenure has the best record of fiscal prudence that any government has. From 4.6 per cent this year we are going to bring it down to 3.3 per cent,” he added.

(Inputs from PTI)