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‘What’s the Emergency to Invoke Section 7?’ Oppn Parties Say Govt ‘Hell-bent on Destroying RBI’

Slamming the government, former Union finance minister and senior Congress leader P Chidambaram alleged that the NDA government is 'hiding facts' about the economy and is 'desperate'.


Updated:October 31, 2018, 9:55 PM IST
‘What’s the Emergency to Invoke Section 7?’ Oppn Parties Say Govt ‘Hell-bent on Destroying RBI’
File photo of RBI headquarters in Mumbai. (Reuters)

New Delhi: Amid a tussle between the government and the RBI, opposition parties on Wednesday accused the NDA regime of trying to damage every institution in the country by interfering in their autonomy and alleged the central bank was being forced to "open bank funding" to defaulting corporates.

While the Congress asked Finance Minister Arun Jaitley to spell out the "overriding emergency" to make the government "take recourse ostensibly" to a never-used provision of the RBI Act for issuing directions to the central bank, the party chief Rahul Gandhi said, "the systematic destruction of India's institutions is nothing short of treason".

Without directly mentioning the Reserve Bank of India (RBI), Gandhi said, "Ironic that a statue of Sardar Patel is being inaugurated, but every institution he helped build is being smashed."

The opposition attack followed the government citing a never-used-before power of issuing directions to the RBI, amid mounting differences between the Finance Ministry and the RBI over the central bank's handling of weak public sector banks, tight liquidity in the market and ways of resolving bad loans in the power sector.

While the RBI went public last week on the need to maintain its autonomy, the Finance Ministry maintained that the autonomy of the central bank, within the framework of the RBI Act, is essential and accepted governance requirement.

Sources in the ministry insisted that the government has not yet taken any action of issuing any specific direction and has only initiated consultations with the central bank on unresolved issues.

Slamming the government, former Union finance minister and senior Congress leader P Chidambaram alleged that the NDA dispensation is "hiding facts" about the economy and is "desperate". His party colleague and Congress spokesperson Manish Tewari alleged that the NDA-BJP government is hell-bent on "destroying" every institution on which India stands.

"We have seen this in case of CBI and now the prime minister and the finance minister have trained their guns on the RBI," he alleged.

"We would like to ask the Finance Minister, what is the overriding emergency that is impelling you to absolutely play havoc with the autonomy of the Reserve Bank of India? What is the overriding emergency which is impelling this government to take recourse ostensibly to Section 7? We have not heard any explanation from the government so far," he said.

Congress leader Anand Sharma said the "assault on RBI autonomy by a reckless government is disturbing and deserves to be condemned. PM Modi and FM Jaitley after their monumental mismanagement of economy are undermining the central bank which has credibility and people's trust".

He added that in its dying days, the government has embarked on a mission to "destroy institutional framework painfully built over decades". The party's chief spokesperson, Randeep Surjewala, tweeted, "Modi ji, First you destroyed the functioning of CBI, Now it is the turn of RBI. It seems for you everything is I', I' & I'. Come out of this self-obsession and stop the assault on India's institutions. Let democracy prevail." Another Congress leader Ahmed Patel said, "The existence of this government is a grave challenge to democracy."

The CPI(M) said the RBI crisis is a brazen move to "force the RBI to open bank funding to desperate defaulting corporates". CPI(M) general secretary Sitaram Yechury said after judiciary, Parliament and CBI, the Modi government was trying to damage the RBI. The government's attempt to blame institutions was nothing but to hide its failures, he said.

AIMIM president Asaduddin Owaisi said if RBI Governor Urjit Patel steps down, then it would be the "consistent policy" of the Modi government to "pull down" independent organisations in its four-year of rule. "If he resigns, it'll be interference in autonomy of RBI. Like they destroyed CBI autonomy, now it's RBI's turn," Owaisi tweeted.

NCP leader and Rajya Sabha MP Majeed Memon said the Modi government was "depriving institutions of autonomy and authority to work independent of the government".

He said the latest face-off between the government and the RBI was a continuation of how "institutions were being destroyed", starting from the unprecedented "revolt" by the Supreme Court judges early this year for "interfering in judicial proceedings", followed by the rumblings in the CBI.

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