Written byGarima Bora ·
Former Union Finance Minister P Chidambaram today asked the Center what was its "tearing hurry" to "fix" the capital framework of Reserve Bank of India when the ruling dispensation had just four months to complete the term.
In a series of tweets, the Congress leader slammed the government for allegedly seeking funds from RBI despite claiming that its (Center's) fiscal math was correct.
Government claims that its fiscal math is correct. It boasts that it has given up Rs 70,000 crore of borrowing for 2018-19. If so, why does it need money from the reserves of RBI this year?— P. Chidambaram (@PChidambaram_IN) November 11, 2018
If the government does not need any more money this financial year, why is it mounting pressure on RBI in the last 4 months of its tenure? Why did it keep silent for 4 years and 6 months?— P. Chidambaram (@PChidambaram_IN) November 11, 2018
The Central government had on Friday said it was discussing an "appropriate" size of capital reserves that the central bank must maintain, but denied seeking a massive capital transfer from the RBI.
The RBI has a massive Rs. 9.59 lakh crore reserves and the government, if reports are to be believed, wants the central bank to part with a third of that fund.
Economic Affairs Secretary Subhash Chandra Garg clarified the government wasn't in any dire need of funds and that there was no proposal to ask the RBI to transfer Rs. 3.6 lakh crore.
He said the only proposal under discussion was to "fix appropriate economic capital-framework of RBI".
Economic capital framework refers to the risk capital required by RBI while taking into account different risks.
Lot of misinformed speculation is going around in media. Government’s fiscal math is completely on track. There is no proposal to ask RBI to transfer 3.6 or 1 lakh crore, as speculated. (continued...).— Subhash Chandra Garg (@SecretaryDEA) November 9, 2018
Government’s FD in FY 2013-14 was 5.1%. From 2014-15 onwards, Government has succeeded in bringing it down substantially. We will end the FY 2018-19 with FD of 3.3%. Government has actually foregone 70000 crore of budgeted market borrowing this year. ( continued .....)— Subhash Chandra Garg (@SecretaryDEA) November 9, 2018
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