Center is eyeing RBI reserves to fund ‘electoral lollipops’: Congress

Center is eyeing RBI reserves to fund ‘electoral lollipops’. Krishnan

The Congress alleged the Centre is planning to “loot” the RBI’s reserve as the elections are coming. Terming the move as “demonetization phase-2” the Opposition party regulated the Narendra Modi government is coercing the RBI to pay a special dividend of ₹3.6 lakh crore, equal to nearly 40 percent of the reserves accumulated over decades. “This is 2 percent of India’s GDP,” party spokesperson and MP Abhishek Singhvi said.

Saying to reporters here on Monday, Singhvi added that demonetization shaved off 1.5 percent of the country’s GDP and severely denigrated the institutional autonomy of the RBI. “Now Modi plans demonetization part two that will again shave off 2 percent of India’s GDP in one shot,” he said quoting media reports that the Centre wants the RBI to give a special dividend of ₹3.6 lakh crore. “Staring at an imminent defeat in the five State Assembly elections and the ensuing Lok Sabha elections, a desperate Modi Government wants to take the family silver of the RBI in order to indulge in pre-election sop-splash,” alleged Singhvi.

According to him, the Centre instantly has risen from its deep slumber to pounce on the cash reserves at the RBI. “A cobweb of fraudulent narrative, which smacks of despotism and complete disregard for institutional integrity towards the RBI, is being carefully weaved by the Modi government so that it snatches away the family silver in an election season, in order to hide its mal-governance and failures,” he said.

“What is the required for this quick fix solution, which will further deteriorate the contingency stability? How does the government seek to battle plummeting market confidence which will be a result of utilizing the RBI reserves?” he asked.

He commented the Centre has made a windfall gain of ₹12 lakh crore in the past four years from levies on petrol and diesel. “Where has the money gone? Why does it not use that money to fund its electoral lollipops? Wouldn’t this money be used to recapitalize the PSUs and banks which will only benefit big crony friends of Modi?” he added.

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