The RBI’s decision to transfer a surplus of Rs 1.76 lakh crore to the government kicked off a political storm Monday, with the Opposition coming down heavily on the Centre amid the economic slowdown.
Congress leader and Rajya Sabha MP Anand Sharma demanded a White Paper on the state of the economy from the government. “We know they are less than honest, they will try to fudge the data, embellish numbers but they must
do it,” he said.
Sharma also said the RBI’s move would bring down the cash reserve of the central banking institution to a minimum, while CPI(M) general secretary Sitaram Yechury said the economy had never been “assaulted so mercilessly” as under this government.
Underscoring that former RBI governors like Raghuram Rajan and Urjit Patel had objected to the move of transferring the surplus, Sharma said the money was meant to be used during emergency situations.
“India is in a deep financial crisis. The economy is in shambles, all indicators of development are low. India’s GDP is continuously falling,” Sharma said while addressing a press conference at the Congress headquarters.
With the GDP growth rate hitting a five-year low of 5.8 per cent in the January-March quarter, the Congress leader projected that the downward slide would continue in the current financial year’s first quarter. “For Q1, for which final figures will be out on August 30, GDP is projected to be at 5.6 per cent, the least in the last 7 years,” he said.
Flagging that industries were in danger, be it automobile sector or others, Sharma said the rupee was currently Asia’s worst-performing currency. “Our index of industrial production is at 2% and for manufacturing, it is 1.2%. The rupee has lost 4% of its value. Unemployment is at 8.2%, while in reality, it is more than 20%,” he said.
Sharma’s broadside comes after former Congress chief Rahul Gandhi and Jairam Ramesh too lashed out at the Modi government over the transfer, which includes Rs 1.23 lakh crore of surplus for 2018-19 and Rs 52,637 crore of excess provisions identified under a revised Economic Capital Framework (ECF) adopted by the RBI board. The transferred amount is over three times the five-year average of Rs 53,000 crore.
Rahul Gandhi said the government was “clueless” on how to solve its “self-created economic disaster” and was “stealing” from the central bank.
“PM & 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 & sticking it on a gunshot wound. #RBILooted,” Gandhi tweeted.
Urjit Patel & Viral Acharya held the fort. They were forced to leave. The fort was breached. The Govt of India now usurps a huge windfall from the RBI going contrary to what the central bank’s own think tank CAFRAL had said. Fiscal breathing space but at what and whose cost?
— Jairam Ramesh (@Jairam_Ramesh) August 27, 2019
Jairam Ramesh, who only days ago told the Opposition that “demonising” the PM all the time won’t be of any help, hit out at Centre for “usurping huge windfall from RBI”
“Urjit Patel & Viral Acharya held the fort. They were forced to leave. The fort was breached. The Govt of India now usurps a huge windfall from the RBI going contrary to what the central bank’s own think tank CAFRAL had said. Fiscal breathing space but at what and whose cost?” Ramesh tweeted.
On his part, CPI(M) leader Sitaram Yechury alleged that since 2014 the Modi government had appropriated 99 per cent of RBI’s profits to fund its propaganda campaigns. “It has now siphoned off Rs 1.76 lakh crores ostensibly to recapitalise banks which have been looted by Modi’s cronies,” he said.