Amid the controversy over how much capital the Reserve Bank should keep as its reserves, a BJP MP Monday said by holding on to the excess money, it is resorting to raiding the economy. Participating in the debate on the Supplementary Demands for Grants in the Lok Sabha, Anurag Thakur also cited infrastructure projects being stuck due to lack of liquidity.
He sought to blunt opposition charges that the government was encroaching on the autonomy of the Reserve Bank of India.
“The developing economies keep 7 per cent of the reserves, conservative economies have 14 per cent of the reserves while the RBI keeps 32 per cent. It is not the raid on the RBI, but it is the RBI’s raid on the economy,” he said.
He said the fundamentals of the Indian economy were very strong and that the fiscal deficit, the current account deficit and inflation were under check.
The transfer of reserves had been the bone of contention between the government and the RBI.
To address this issue, the RBI has formed an expert committee under its former Governor Bimal Jalan to decide the appropriate level of reserves that the regulator should hold.