What is government's 'tearing hurry' to 'fix' RBI capital framework: P Chidambaram 

The Congress leader said the government had claimed that its "fiscal math is correct" and "boasts" that it had given up Rs 70,000 crore of borrowing for 2018-19.

Published: 11th November 2018 12:41 PM  |   Last Updated: 11th November 2018 12:49 PM   |  A+A-

Former Finance Minister P Chidambaram 

By PTI

NEW DELHI: Former Union finance minister P Chidambaram Sunday asked the Centre what was its "tearing hurry" to "fix" the capital framework of Reserve Bank of India when the ruling dispensation had just four months to complete the term.

In a series of tweets, the senior Congress leader slammed the government for allegedly seeking funds from the RBI despite claiming that its (Centre) fiscal math was correct.

ALSO READ | Swadeshi Jagran Manch, Modi government want Urjit Patel out of RBI, says P Chidambaram

"The NDA government has competed 4 years and 6 months of its term. It has effectively 4 months left. What is the tearing hurry to 'fix' the capital framework of RBI?" he said.

Chidambaram said if the government did not need any more money this financial year, why was it "mounting pressure" on the central bank in the last four months of its tenure.

"Why did it keep silent for 4 years and 6 months?" he said.

The Congress leader said the government had claimed that its "fiscal math is correct" and "boasts" that it had given up Rs 70,000 crore of borrowing for 2018-19.

"If so, why does it need money from the reserves of RBI this year?" he said.

The central government had on Friday said it was discussing an "appropriate" size of capital reserves that the central bank must maintain, but denied seeking a massive capital transfer from the RBI.

The RBI has a massive Rs 9.59 lakh crore reserves and the government, if reports are to be believed, wants the central bank to part with a third of that fund -- an issue which along with easing of norms for weak banks and raising liquidity has brought the two at loggerheads in recent weeks.

Economic Affairs Secretary Subhash Chandra Garg took to Twitter on Friday to clarify that the government was not in any dire need of funds and that there was no proposal to ask the RBI to transfer Rs 3.6 lakh crore.

"There is no proposal to ask RBI to transfer (Rs) 3.6 or (Rs) 1 lakh crore, as speculated," he tweeted.

ALSO READ | Aircel-Maxis case: Delhi court extends protection from arrest to P Chidambaram, son till November 26​

"Government's FD (fiscal deficit) in FY 2013-14 was 5.1%. From 2014-15 onwards, Government has succeeded in bringing it down substantially. We will end the FY 2018-19 with FD of 3.3%. The government has actually foregone (Rs) 70,000 crore of budgeted market borrowing this year," Garg said.

The official said the only proposal under discussion was to "fix appropriate economic capital framework of RBI".

Economic capital framework refers to the risk capital required by the central bank while taking into account different risks.



Comments(2)

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

  • rajan

    it is better to get the same amount from the temples like tirumala
    4 years ago reply
  • badri narayanan poondi

    As usual the govt (EA Secy) had come with a belated clarification which seems a face saving effort. But the big question is that an ex FM who had flouted the law while in office and facing charges for serious offences is loudly proclaiming financial ethics and the media continue to call him a 'leader'. He had been exposed in public domain by Gurumurthy et al and even challenged to sue if their exposes were false which didn't provoke the 'leader'. Would it not be fair for him - may be too much to expect from contemporary politician - to first come clean before playing active politics? He was the one who introduced the controversial and potentially harmful (to national security) Participatory notes to channel funds into the country? The strong clout enjoyed by him with the top Central bureaucracy and perhaps judiciary (with some of his juniors in top posts) is believed to delay the process of law against criminal cases against him and he has no moral status to advise rulers on any subject as an 'expert'; perhaps he may advise on how to circumvent law and achieve financial gains!
    4 years ago reply
flipboard facebook twitter whatsapp