Questions on RBI’s credibility outlandish, says Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman with MoS Anurag Thakur during a press conference in Pune on August 27, 2019.

Union Finance Minister Nirmala Sitharaman with MoS Anurag Thakur during a press conference in Pune on August 27, 2019.   | Photo Credit: PTI

Nirmala Sitharman’s remarks come after Rahul Gandhi hit out at the government over the record cash transfer from the RBI

Any suggestions on the credibility of the Reserve Bank of India (RBI) are “outlandish”, Union Finance Minister Nirmala Sitharaman said on Tuesday, responding to criticism on the transfer of ₹1.76 lakh crore surplus from the central bank to the exchequer.

Speaking a day after the Central government’s windfall from the RBI, Ms. Sitharaman said the government was yet to decide on the deployment of the funds.

“I cannot comment right now on how these funds would be deployed. We will inform [the media] only after we have taken a decision on this,” the Minister said at a press briefing.

Ms. Sitharaman and Minister of State for Finance and Corporate Affairs Anurag Thakur were in Pune for an in-depth meeting with tax officials, traders, entrepreneurs and industry experts on issues related to the GST. 

Refutes Rahul

The Minister slammed Congress leader Rahul Gandhi over the latter’s remarks accusing the Narendra Modi-led Central government of “stealing” money from the RBI.

“Whenever Congress MP Rahul Gandhi has used words like ‘chori and chor’ (thievery) [pertaining to the BJP-led NDA government], a thing that comes to my mind is that though he tried his best to malign us using such words, the public has given him and his party a fitting reply ” she said and added that the Congress had no right to tarnish the RBI’s reputation.

“Rahul Gandhi should first ask the erstwhile Finance Ministers and senior leaders of the Congress party before hurling allegations of “theft from the RBI” at us…but it appears he has become an expert at using words like chor and chori,” said the Finance Minister.

Stating that she was not responding to any specific criticism in particular, Ms. Sitharaman said the Bimal Jalan committee on economic capital framework (ECF) included eminent experts and that it was constituted by the RBI itself and not by the government.

“It is worrying that a committee appointed by the Reserve Bank is being questioned. The committee has had several sittings and has come out with a formula. It was appointed by the RBI, it had experts and they gave a formula, based on which the amount was arrived at,” the Minister said.


“Now, any suggestions about credibility of RBI, therefore, for me seems a bit outlandish considering that the committee was appointed by the Reserve Bank itself,” the Minister added. 

Ms. Sitharaman further said the committee members themselves had given an explanation through the media that issues like fiscal financial stability, the surplus to meet any emergency and contingency had all been factored in by the committee while coming up with its formula.

Responding to questions on the auto industry’s demands for a GST rate cut, she said GST rates were not in the Finance Ministry’s domain but that of the GST Council.

When asked about the stimulus announced last week to revive the sagging auto sector, Ms. Sitharaman said: “I have announced some measures for the automobile sector last week…I have to see how it goes. I’ll also have to take some inputs to gauge the impact of those measures.”

Ms. Sitharaman said the meeting with tax officials and traders had chiefly focused on matters pertaining to GST forms, simplifications, and deadline-related issues.

Urging tax officials not to overreach themselves to meet their targets, she said that the tax deadlines that had been fixed were in consultation with all the authorities.

“They are achievable deadlines and realistic. My request to them was not to overreach,” she said.

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Printable version | May 27, 2020 12:40:58 PM |

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