RBI surplus transfer: Govt hasn't decided on deployment of funds from central bank, says Nirmala Sitharaman

  • Nirmala Sitharaman said that questioning credibility of Reserve Bank, which appointed the Jalan panel, is worrying

  • The finance minister said that the government wants entrepreneurs to carry on with their business without worry

  • The finance minister said that tax deadlines that have been fixed are in consultation with all the authorities

A day after the Centre got a record windfall from the RBI under Governor Shaktikanta Das to the tune of Rs 1.76 lakh crore, Finance Minister Nirmala Sitharaman on Tuesday said that the government hasn't decided on the deployment of funds from the central bank.

Sitharaman, at a media briefing in New Delhi on Tuesday, said that Bimal Jalan committee had eminent experts in it and any suggestions about the credibility of the RBI, therefore, seem a bit "outlandish."

She said that questioning credibility of Reserve Bank, which appointed the Jalan panel, is "worrying". Earlier Congress leader Rahul Gandhi hit out at the government over the record cash transfer by the RBI, saying the prime minister and the finance minister are "clueless" about solving the "self-created economic disaster" and accused them of "stealing money" from the Bank.

 RBI surplus transfer: Govt hasnt decided on deployment of funds from central bank, says Nirmala Sitharaman

File image of Finance Minister Nirmala Sitharaman. PTI

Responding to Gandhi's criticism, Sitharaman said that Congress should have spoken to its own finance ministers before making allegations of "stealing RBI capital."

"Whenever Rahul Gandhi raises things like 'chor,chori,' one thing comes to my mind, he tried his best 'chor, chor,chori,' but public gave him befitting reply. What's the point of using the same words again?" Sitharaman was quoted as saying by ANI.

The finance minister said that the government wants entrepreneurs to carry on with their business without worry.

The excess reserve transfer is in line with the recommendation of former RBI governor Bimal Jalan-led panel constituted to decide the size of capital reserves that the central bank should hold.

The finance minister said that tax deadlines that have been fixed are in consultation with all the authorities. "They are achievable and realistic," Sitharaman added.

The receipts from the RBI will give a fillip to the government's efforts to boost the economy from a five-year low. Finance Minister Nirmala Sitharaman had last week announced a slew of measures to prop up growth even as the government tried to stick to the target of keeping fiscal deficit at 3.3 per cent of the GDP.

The additional cash will now give the Centre more headroom for stimulating the economy. The Modi government and the RBI under its previous governor Urjit Patel had been at loggerheads over the optimum level of surplus capital with the central bank.

As a result, the RBI in its crucial November 2018 board meeting decided to form a committee to review the economic capital framework (ECF) for the Reserve Bank.

However, Patel quit before the committee could be formed. Subsequently, the panel was constituted in consultation with new RBI Governor Shaktikanta Das on 26 December.

With PTI inputs

Updated Date: Aug 27, 2019 18:26:30 IST