RBI is not a limited company: Former finance minister P Chidambaram

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GUWAHATI: Former finance minister, P Chidambaram said that Reserve Bank of India (RBI) is not a limited company.

Chidambaram, who was in Guwahati on Friday to hold consultation for preparation of party’s manifesto for 2019 Lok Sabha polls, said that the Prime Minister Narendra Modi-led government is greedy and wants to take away the reserves of RBI.

“This government (NDA) not only wants the profit but also something like Rs 1 Lakh Crore from the reserve of RBI too. This government is greedy. No government in the past had asked for the reserve in RBI.”

He added, “RBI has board of directors, but that cannot be compared to with any private or public company. It is the central bank. BJP government is trying to see RBI as a limited company. They (BJP) hardly have understanding of the central Banks’s role and function.”

The former finance minister said that government is eyeing RBI’s reserve for it did not get anything out of the demonetization as most of the money was back in the banks.

On the fallout of the November 19 RBI’s board meeting, he said, “ Even if the RBI governor resigns or complies with the government order of giving money from the reserve the result will be catastrophic , worse thandemonetization. My information says that the government may force to pass a resolution at the RBI board meeting to transfer large sum of money from the reserve. Two scenarios can emerge if such a situation happens. Either the RBI gives in or resigns. Both the situation will be a disaster and will have catastrophic impact on the country’s economy.”

He said that Congress party believes that RBI has the mandate to maintain monetary stability and nothing should be done to impair its ability to do so. “The immediate goal of the government is to lay its hand on the reserves of the RBI and appropriate a sum of at least one lakh Crore to meet its fiscal deficit target and to increase spending in an election year.”

He added that small traders and business have voiced their grievance against GST. “If UPA comes to power would redesign the GST. The GST that was conceived during UPA’s rule however GST in its present form is a fake one for it is ill designed.”

Source: Economic Times