Govt seeking to demolish RBI, Rs 3.6-lakh crore demand is for doling out pre-poll freebies: Cong

The Congress Tuesday accused the Modi government of seeking to "demolish" the Reserve Bank of India (RBI) and said if the Centre's reported demand for Rs 3.6 lakh crore from the central bank fructifies, it would amount to "the great Indian robbery".

The party also said the government wanted the money to dole out freebies aheaf of the 2019 parliamentary election.

Congress president Rahul Gandhi attacked Prime Minister Narendra Modi over the report, alleging that he needs the amount to fix the "mess his genius economic theories" have created.

He also urged Reserve Bank Governor Urjit Patel to "stand up" to the prime minister and "protect the nation".

There was no immediate reaction on the charge made by Gandhi.

"Rs 36,00,00,00,00,000. That's how much the PM needs from the RBI to fix the mess his genius economic theories have created. Stand up to him Mr Patel. Protect the nation," the Congress chief tweeted and also posted the media report.

He cited the media report claiming that at the heart of the RBI-government standoff was a proposal by the Finance Ministry seeking to transfer a surplus of Rs 3.6 lakh crore, more than a third of the total Rs 9.59 lakh crore reserves of the central bank, to the government.

Congress spokesperson Manish Tewari said at a press conference that the amount was being sought to allegedly dole out "freebies" ahead of the 2019 parliamentary election.

He said such a move would have "profound" implications on the macro-economic stability of India.

Alleging that the NDA government was "demolishing" the RBI, Tewari asserted that the Congress would resist all attempts to undermine the economic sovereignty of India and this "adventurism" would not be allowed.

"The facts which are emerging in the public space, the government wants the RBI to part with Rs 3.6 lakh crore out of Rs 9.59 lakh crore which constitutes the cash reserve of the RBI...," he alleged.

The RBI has been resisting this very strongly, Tewari said, adding the demand by the government was "unprecedented".

"If this were to fructify, this would tantamount to the great Indian robbery," the former Union minister said.

"This is going to have profound implications on the macro-economic stability of India...this is one of the fundamentals of the Indian economy that the RBI has enough liquidity available in order to meet any contingency. And today the NDA/BJP government wants to demolish that confidence (of investors) and demolish the Reserve Bank of India in the process," he said.

Talking about the government's intentions, Tewari alleged the reasons for such a move can be found in the economic data put out by the Ministry of Finance showing fiscal deficit and the current account deficit were mounting on a daily basis.

"So, in order to bridge that fiscal deficit, the government has started eyeing the money which is lying with the RBI. And what is even more disturbing is that they perhaps want to use the money in order to give out freebies before the 2019 elections," he said.

Tewari said the government must learn from Argentina where the transfer of USD 6.6 billion from the central bank to the treasury sparked off the worst constitutional crisis. Argentina is before the IMF for a USD 50-billion bailout, he said.

Talking about the reported proposal by the finance ministry seeking to transfer a surplus of Rs 3.6 lakh crore to the government, Tewari said it was an extremely "serious, sensitive and delicate" issue which will have very serious implications for the economic sovereignty of India.

While Gandhi has accused the government of "destroying" institutions with its alleged strong arm tactics, the differences between the Modi government and the RBI came out in public domain after a deputy governor raised concerns about the central bank's autonomy and warned that if the government did not respect the central bank's independence, it would sooner or later incur the wrath of financial markets.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)