P Chidambaram slams Center over RBI crisis, alleges Narendra Modi govt is 'greedy'

P Chidambaram on Friday alleged that the BJP government is greedy and wants to take away the Central bank’s reserves to make up for its fiscal requirement.

BJP hardly has the understanding of the Central Bank's role and function, Chidambaram said. (Image: PTI)

New Delhi: Sharing his view on the running tussle between the government and Reserve Bank of India (RBI), former finance minister P Chidambaram on Friday alleged that Prime Minister Narendra Modi-led Bharatiya Janata Party (BJP) government is greedy and wants to take away the Central bank’s reserves to make up for its fiscal requirement. “This government is greedy. No government in the past has asked for the reserve with the Reserve Bank of India," news agency IANS quoted Chidambaram as saying, who was in Guwahati to hold consultations for preparation of the party's manifesto for the 2019 Lok Sabha polls. The senior Congress leader stated that the RBI is not a limited company. “The RBI has a board of directors, but that cannot be compared with any private or public company. It is the central bank. The BJP government is trying to see the RBI as a limited company. They hardly have the understanding of the Central Bank's role and function,” he said. Further in his speech, Chidambaram blamed the decision of demonetisation and said that the government did not get anything out of it and thus it is now eyeing the RBI’s reserves. Speaking about the speculations of RBI governor Urjit Patel resigning on Central bank’s board meeting scheduled for November 19, he said that even if the RBI Governor resigns or complies with the government order of giving money from the reserves, the result will be catastrophic and even worse than demonetisation. "My information says that the government may force to pass a resolution at the RBI board meeting to transfer a large sum of money from the reserves. Two scenarios can emerge if such a situation happens. Either the RBI gives in or the Governor resigns. Both the situations will be a disaster and will have a catastrophic impact on the country's economy," the former Finance Minister warned. “The Congress party believes that the 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 hands 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,” Chidambaram added. However, a top finance ministry official on Friday refuted to the reports of government seeking Rs 3.6 lakh crore from RBI reserves. Economic Affairs Secretary Subhash Chandra Garg took to Twitter and wrote that there was no such proposal and that the country's fiscal deficit target was on track. (With agency inputs)