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November 19 Day of Reckoning in Centre's Catastrophic Bid to Capture RBI, Says Chidambaram

The former finance minister said the government has packed the central bank's board with handpicked nominees, and was making every attempt to push through its proposals.

Sujit Nath | News18.com

Updated:November 8, 2018, 4:34 PM IST
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November 19 Day of Reckoning in Centre's Catastrophic Bid to Capture RBI, Says Chidambaram
File photo of senior Congress leader and former Finance Minister P Chidambaram. (PTI)
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Kolkata: Senior Congress leader P Chidambaram on Thursday accused the Centre of pressuring the RBI to release Rs 1 lakh crore from its contingency reserves as they want the money to step up expenditure in an election year.

“Finding all other avenues closed, in desperation the government demanded Rs 1 lakh crore from the reserves of the RBI. When the RBI governor refused to oblige, the government took the extraordinary and unprecedented step of invoking Section 7 of the RBI Act,” he said at a press conference.

Alleging that the government was trying to “capture” the central bank by using the power, he said such a move would prove to be catastrophic for the nation.

“If the RBI Governor stands his ground, then the government is planning to issue a direction to the RBI under section 7 directing the RBI to transfer the money (Rs 1 Lakh Crore) to the government’s account. This will lead to a catastrophe,” he said.

The former finance minister said the government has packed the central bank's board with handpicked nominees, and was making every attempt to push through its proposals at the RBI board meeting on November 19. “The day of reckoning is November 19 when the RBI Board is scheduled to meet,” he said.

Chidambaram said if the government does pushes through its agenda, the RBI governor will be left with only two options - follow the order or resign.

“In my view, whichever option is taken by the Governor, it will irretrievably damage the credibility and reputation of the RBI. The government is trying to use RBI as a private company. They are trying to capture RBI. Unfortunately, one more crucial institution would fall from grace,” he added.

Speaking on the occasion of the second anniversary of the Centre’s move to demonetise 86 per cent of the currency in circulation at the time, the Congress leader said we’ll have to see if after November 8, November 19 would also be remembered as a day of catastrophe.

“Demonetisation did not put an end to fake currency or black money. It did not render any currency notes worthless and the government did not reap a bonanza of Rs 3 lakh to Rs 4 lakh Crore. All demonetised notes - actually 99.30 % - were returned to the RBI,” he said.

“The government no longer talks about achhe din, development, jobs or investment. Now they only talk about Hindutva, giant statues, big idols etc. The promises of ache din lies in shambles. The Prime Minister himself has resurrected the divisive and controversial issues,” he added.
| Edited by: Aakarshuk Sarna
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