“Stealing From RBI Won’t Work”: Rahul Gandhi Attacks Centre Over Payout

Congress MP Rahul Gandhi today made lacerating comments against the government after the Reserve Bank of India approved a record Rs. 1.76 lakh crore payout to it, a move that he alleged was the same as “stealing from the RBI”.

“PM & FM are clueless about how to solve their self created economic disaster. Stealing from RBI won’t work – it’s like stealing a Band-Aid from the dispensary & sticking it on a gunshot wound,” Mr Gandhi tweeted.

The record payout by the RBI comes at a time when there are signs of severe stress in several sectors, from housing to manufacturing. The total payout of Rs. 1.76 lakh crore includes Rs. 1.23 lakh crore as dividend and Rs. 52,640 crore surplus capital, the RBI said in a statement. The dividend payment includes Rs. 28,000 crore already transferred to the government in February, before the national election.

“Rs. 1.76 lakh cr given to the govt by RBI is almost the exact same amount missing from Budget 2019 announcement. Where was that money spent? Why was it missing from the Budget? Looting the RBI like this only devastates our economy further & reduces credit rating of the bank,” the Congress party tweeted.

During the United Progressive Alliance (UPA) rule in 2009 or 10 years ago, the RBI transferred Rs. 25,000 crore to the centre.

In comparison, the amount of transfer this year is more than double the Rs. 68,000 crore that the RBI provided to the Modi government last year. It exceeds the centre’s budget estimate of Rs. 90,000 crore as dividend from the RBI this year.

The centre last week said it will infuse Rs. 70,000 crore to public sector banks to boost economic growth from a five-year low. Analysts say this amount may come from the RBI payout.

In October last year, there was much debate among the opposition parties, economists and the government led by Prime Minister Narendra Modi over reports that the centre was considering to use a never-used legal provision in trying to resolve disagreements with the RBI. One of the provisions in Section 7 of the Reserve Bank of India Act allows a state-backed board of directors to exercise all powers of the central bank.

This prompted former RBI Deputy Governor Viral Acharya to speak out, warning that toying with the central bank’s independence could be “potentially catastrophic”. “The risks of undermining the central bank’s independence are potentially catastrophic,” said Mr Acharya in an address to top industrialists, adding that rash moves could trigger a “crisis of confidence in capital markets that are tapped by governments and others in the economy.”