Thursday , October 21 2021

Subhash Chandra Garg: Government does not seek Rs 3.6 lakh crore from RBI | Business News from India


NEW DELHI: The government on Friday said it was

not seeking Rs 3.6 lakh crore capital
of the Reserve Bank, but is only in discussion to fix the central bank's appropriate economic capital structure.

"There is no proposal to ask the RBI to transfer Rs 3.6 or 1 lakh crore, as speculated," tweeted the Secretary for Economic Affairs Subhash Chandra Garg.

He said that the only proposal "under discussion is to establish the appropriate structure of economic capital of the RBI."

Expiring confidence about the government's fiscal mathematics, he said he will stick to the fiscal deficit target of 3.3% for the current fiscal year ending March 31, 2019.

"The government's fiscal deficit for the fiscal year 2013-14 was 5.1%, and from 2014-15, the government succeeded in overthrowing it substantially, ending fiscal year 2018-19 with the Federal Reserve of 3.3 % The government has already abandoned 70,000 crore from the budgeted market by borrowing this year, "he said.

The RBI and the government have not been on the same page on different issues for a few months. The differences came when RBI deputy governor Viral Acharya said the failure to defend central bank independence "would incur the wrath of financial markets."

It later emerged that the government had invoked a never before used provision of the law – Section 7 of the RBI Act – to ease NPA rules so that banks could boost credit and support growth and transfer more dividends to increase liquidity – – issues that the central bank believes can not be ceded.

The rift has increased sharply in recent weeks and will be resumed at the next RBI board meeting on Nov. 19.

Congressional leader and former Finance Minister P Chidambaram accused the government on Thursday of trying to capture the RBI to contain the fiscal crisis, warning that any such measure would be catastrophic.

Modi govt trying to capture RBI: Chidambaram

Congressional leader P Chidambaram on Thursday accused the Narendra Modi government of trying to "capture" the Reserve Bank of India to contain the fiscal crisis, warning that any such measure would be "catastrophic."

"The government is looking at a fiscal deficit crisis, and the government wants to increase spending in an election year." Finding all roads closed in despair, the government demanded Rs 1 lakh crore from RBI reserves, "Chidambaram said. .

The former finance minister claimed that the government had bundled the central bank's board with handpicked candidates and was making every effort to approve its proposals at the next RBI council meeting.

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