P Chidambaram accuses govt of fudging fiscal deficit figures


P Chidambaram accuses govt of fudging fiscal deficit figures for 2013-14; questions 'competence'

Senior Congress leader P Chidambaram has accused Economic Affairs Secretary SC Garg of fudging fiscal deficit figures. In a web of tweets, he said that the fiscal deficit in 2013-14 was 4.4 percent according to official data and not 5.1 percent as Garg mentioned on Friday.

On Friday, Chidambaram said in Guwahati that “shockingly, government’s paper calculated GDP growth in real terms and growth in money circulation in nominal terms, yet compared the two and reached absurd conclusions. So much for the competence of the government.” He warned the NDA government against laying its hands on RBI reserves, stating that it will have “catastrophic” economic consequences for the country. He also commented the minutes of a Reserve Bank of India meeting on 7 November 2016 is a “comprehensive repudiation” of the government’s “justification” for demonetization.

Speaking to reporters in Guwahati, the senior Congress leader said it is clear that the BJP has no understanding of the role of the central bank and no respect for the independence of its governor.

The government has already taken the “extraordinary step” of invoking Section 7 of the RBI Act (that empowers the government to matters directions to the RBI), he said.

He also said that the minutes of a Reserve Bank of India meeting on 7 November 2016 is a “comprehensive repudiation” of the government’s “justification” for demonetization.

He said that the “immediate goal of the government is to lay its hands on the reserves of the RBI and appropriate a sum of at least Rs. one lakh crore to meet its fiscal deficit target and to increase spending in an election year”. He also alleged that “according to reports the BJP government is planning to override the RBI governor through the board of directors in which it has planted its hand-picked nominees”.

Chidambaram warned the NDA government against laying its hands on RBI reserves, saying it will have “catastrophic” economic consequences for the country. He also alleged the minutes of a Reserve Bank of India meeting on 7¬† November 2016 is a “comprehensive repudiation” of the government’s “justification” for demonetization.

Writing to Twitter, Chidambaram said the RBI Board had met on 8 November 2016 and “disagreed” with the key reasons given by the government, but “obediently endorsed demonetization” and that was a “black day” in the central bank’s history.

He also hit out at the government over its claim to “fix proper¬†economic capital framework of RBI” after it rejected as speculation reports that it was seeking the reserve bank’s approval for release of Rs 3.6 lakh crore.

“RBI minutes of 7-11-2016 is a comprehensive repudiation of the government’s “justification” for demonetization. The RBI Board, with many members absent, met at 5.30 pm on 8-11-2016 and disagreed with the key reasons given by the government, yet obediently endorsed demonetization. That was a black day in RBI’s history,” he tweeted.

In Guwahati, Chidambaram said he fears the worst at the next meeting of the RBI board on 19 November. “I consider it my duty to warn the people of the country of the catastrophic consequences of the BJP government’s ill-conceived actions.”

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