Indore: Launching a fresh salvo at the Narendra Modi government, former Finance Minister and Senior Congress leader P Chidambaram on Sunday alleged that after having “failed” to get money out of demonetisation, the BJP government at the Centre was “desperately eyeing” the reserves of the Reserve Bank of India (RBI).
“After having failed to get money out of demonetisation, the BJP-led Centre is now eyeing the reserves of the RBI which is why they have started this problem with the RBI after four-and-a-half years of being in power,” Chidambaram told reporters in Indore.
If reports are to be believed, the RBI has a massive Rs 9.59 lakh crore reserves and the government wants the central bank to part with a third of that fund – an issue which along with easing of norms for weak banks and raising liquidity has brought the two at loggerheads in recent weeks.
However, the government on Friday clarified that it was not in any dire need of funds and that there was no proposal to ask the RBI to transfer Rs 3.6 lakh crore.
Chidamabaram claimed that the government failed to make a profit out of note ban as 99.3 per cent currency came back to the central bank.
Today they are desperate for money. Why? GST collections are short of the target, net direct tax collection is short of the target, the fiscal deficit target. They also want money because this is the election year and they have always spent. They don’t have money”, he added.
Earlier today, the former Finance Minister asked the Centre that what was its “tearing hurry” to “fix” the capital framework of RBI when the ruling dispensation had just four months to complete the term.
In a series of tweets, the senior Congress leader slammed the government for allegedly seeking funds from the RBI despite claiming that its (Centre) fiscal math was correct.
“The NDA government has competed 4 years and 6 months of its term. It has effectively 4 months left. What is the tearing hurry to ‘fix’ the capital framework of RBI?” he said.
Chidambaram said if the government did not need any more money this financial year, why was it “mounting pressure” on the central bank in the last four months of its tenure. “Why did it keep silent for 4 years and 6 months?” he said.
The Congress leader said the government had claimed that its “fiscal math is correct” and “boasts” that it had given up Rs 70,000 crore of borrowing for 2018-19.
“If so, why does it need money from the reserves of RBI this year?” he said.
The central government had on Friday said it was discussing an “appropriate” size of capital reserves that the central bank must maintain, but denied seeking a massive capital transfer from the RBI.