Modi government planning demonetization part-2 by dipping into RBI reserves

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 demonetization shaved off 1.5 percent of India’s GDP and severely denigrated the institutional autonomy of the RBI. Now, the Modi government is planning demonetization 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. (IANS)

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