New Delhi: The Congress on Tuesday accused the government of pushing the economy towards bankruptcy and an economic emergency, and termed the decision of taking Rs 1.76 lakh crore from RBI reserves "catastrophic".
Several Congress leaders, including Rahul Gandhi and Anand Sharma, mounted the attack against the government's move.
The opposition party's stinging criticism came a day after the Reserve Bank of India approved the transfer of a record Rs 1.76 lakh crore dividend and surplus reserves to the government to provide fresh impetus to the economy without widening fiscal deficit.
"When you strip the RBI of its reserves you're leaving the Reserve Bank vulnerable to a series of disasters. The contingency fund is for emergency situations, not to cover up for the govt's economic failures," the Congress said on its Twitter handle.
Rahul Gandhi said Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman are "clueless" about solving the "self created economic disaster" and accused them of "stealing money" from the bank. "Stealing from RBI won't work - it's like stealing a Band-Aid from the dispensary and sticking it on a gunshot wound," he said, using the hashtag "RBILooted".
Senior party spokesperson Sharma demanded a white paper from the government on the state of the Indian economy within a week. He added that data on projects underway and investments in public and private sectors together with the actual factory output should be released.
Sharma also demanded a report on the country's export scenario and the credit offtake by Micro, Small and Medium Enterprises (MSMEs), and the agriculture sector within two weeks.
According to him, the difference in revenue between the government budget and economic survey is Rs 1.7 lakh crore and the dispensation has taken away Rs 1.76 lakh crore from the central bank. "The government made wrong budget, it's in loss. That's why they snatched RBI's money and pushed the country towards an economic emergency," he told reporters. "It is a catastrophic decision. The government has done it out of sheer desperation. Its follies have brought the Indian economy to ruins," the Congress leader said.
Sharma said the RBI now has no money to tackle any economic eventuality as it cannot go below the benchmark 5.5 per cent reserves, going by the global economic crisis that various countries are faced with. "India is in a deep financial crisis. The economy is in shambles, all indicators of development are low. India's GDP is continuously falling," he said, lamenting that the government is thrusting India's economy into "financial bankruptcy".
In a separate tweet, Congress chief spokesperson Randeep Surjewala wondered whether the move was "fiscal prudence or fiscal hara-kiri".
He said Modi 2.0 has converted the 'R' in RBI from 'Reserve' to 'Ravaged'. "Contingency Reserve of RBI meant for extreme financial emergencies and war-like situations is being used by BJP Government to bury its monumental mess on economic front! BJP has finished RBI's credibility!" he said. "Is it a sheer coincidence that the Rs 1.76 Lakh Crore borrowed by RBI matches with the 'Missing' amount in the Budget Calculations," he asked.
Party leader Jairam Ramesh made a reference to former RBI governor Urjit Patel and deputy governor Viral Acharya to make his point. "Urjit Patel and Viral Acharya held the fort. They were forced to leave. The fort was breached. The Government 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?" he tweeted.
His party colleague Abhishek Singhvi also spoke out on the microblogging site. "Fair Question:If Indian economy is just fine as contended weeks ago by Govt-A. Why the spate of measures to arrest the falling economy? B. Why 1.76 Lac Crore used from RBI? C. Why the denial when all Opposition wanted was an acknowledgement?" Using wordplay to make his point, spokesperson Sanjay Jha said, "Robbed Bank of India: RBI".
Sharma added that the Jalan Committee had earlier said the amount will be transferred to the government in instalments over a period of four-five years. "Instead, it was given in one go. This confirms India's deep economic and financial crisis," he said.
He said the government decided that the RBI's excess money, known as Contingency Risk Buffer, be given to it. "No central bank hands over its risk buffer to the government, but the RBI on the recommendation of the Jalan committee, decided to hand over Rs 1.76 lakh crore to the government in one go."
Updated Date: Aug 27, 2019 23:25:08 IST