Modi government planning demonetisation part-2 by dipping into RBI reserves: Congress

New Delhi :  The Congress on Monday accused Prime Minister Narendra Modi-led government of planning a ‘demonetisation part-2’ by forcing the central bank to part with a large chunk of its reserves.

“Modi-made disaster of demonetisation shaved off 1.5 per cent of India’s GDP and severely denigrated the institutional autonomy of the RBI. Now, the Modi government is planning demonetisation part-2 by coercing the RBI to pay a special dividend of Rs 3.6 lakh crore,” Congress spokesperson Abhishek Manu Singhvi told reporters here.

Singhvi rejected as “bunkum” the government’s argument that it was planning to fix the capital framework of the Reserve Bank of India, and not dip into its reserves, and accused the Centre of hatching a “nefarious ploy” to trample upon the institutional integrity of the central bank.

“Staring at an imminent defeat in the 5 state elections and the ensuing Lok Sabha elections, a desperate Modi government wants to grab the family silver of the RBI in order to indulge in pre-elections sop-splash,” he charged.

Dismissing reports that the government had sought Rs 3.6 lakh crore from the RBI reserves as “misinformed speculation”, Economic Affairs Secretary Subhash Chandra Garg on November 9 said there was no such proposal and that the country’s fiscal deficit target was on track.

He, however, said that the proposal under discussion between the government and the Reserve Bank of India was to fix “appropriate” economic capital framework of the RBI.

Singhvi questioned the need to fix the RBI’s capital framework.

“The Modi government has come forth with a bunkum and bogus argument that it wants to fix the economic capital framework of the RBI.

“What is the meaning of ‘fix appropriate economic capital framework of RBI’ which is being discussed by the government? What is the need of this quick-fix solution, which will further deteriorate the contingency stability,” asked Singhvi.

He said that the move will shave 2 per cent off India’s GDP.

“A cobweb of fraudulent narrative, which smacks of despotism and complete disregard for institutional integrity towards the RBI, is being carefully weaved by the Modi government so that it snatches away the family silver in an election season in order to hide its malgovernance and failures,” he added.

Published on: Nov 12, 2018 at 19:08 IST

IANS