Reacting to the Reserve Bank of India’s decision of transferring a fund of Rs 1.76 lakh crore to the central government, Rajya Sabha MP and Congress leader Jairam Ramesh Tuesday said by usurping the huge amount from the central bank, the government of India has gone against what the RBI’s own think tank CAFRAL had said.
“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.
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
The Central Board of RBI board on Monday decided to transfer a surplus of Rs 1.76 lakh crore to the exchequer, nearly double the estimated Rs 90,000 crore in the Budget for 2019-20. The move could enable the government kick-start a much needed public spending push, alongside possibly paring of the fiscal deficit, estimated at 3.3 per cent of the GDP.
One of the many issues of friction between the government and the central bank was the transfer of higher surplus during the tenure of Urjit Patel as RBI Governor. In fact, he quit RBI on December 10 last year, three weeks after the board of RBI board agreed to set up a committee to thrash out a new framework under his governorship.
Following RBI’s decision to disburse excess funds to the Centre, Congress leader Rahul Gandhi had, earlier on Tuesday, hit out at the Centre saying government was “clueless” on how to solve its “self-created economic disaster” and was “stealing” from the central bank. Using an anecdote, Gandhi said it was “like stealing a Band-Aid from the dispensary and sticking it on a gunshot wound”.
Meanwhile, Ramesh’s comment criticising the government comes just days after he told the Opposition that “demonising” the PM all the time won’t be of any help. Addressing a gathering while launching a book, “Malevolent Republic: A Short History of the New India”, written by Kapil Satish Komireddi, Ramesh said the political class should acknowledge the work done by the Modi government in the past five years due to which he was voted back to power by over “30 per cent of the electorate”.