Former Union Finance Minister P Chidambaram came down heavily at the Modi-led Centre over the feud between RBI and the government.
Over the issue of Urjit Patel‘s abrupt resignation on Monday, Chidambaram said that the Modi government thinks it owns the RBI.
He slammed the government by saying, “This government thinks it owns the Reserve Bank of India (RBI). This government thinks the RBI is another department of the government. This government thinks if CBI is listening to them, why is RBI not listening?”
He threw a barrage of criticism for government’s desperation to get hold of RBI’s reserves. He added, “This government simply does not understand what a central bank’s independence is.”
Taking a dig at the Centre, he said, “This government is like ‘I have one hoard of cash, so much cash lying there. I can’t meet my fiscal deficit this year, my GST revenues are less than expected, I have not provided for the food subsidy, I have not provided for Ayushman Bharat programme, and I need money in my election year. What do I do? There is this pot of gold. Now I want to reach that pot of gold’. That’s the only aim of this government.”
On Urjit Patel and Demonetization
On Urjit Patel’s resignation, Chidambaram said, “Urjit Patel should have walked out on November 19 [In Nov 19 meeting, govt pushed for a relaxation of capital norms, higher liquidity] itself. He delayed his resignation. Perhaps he gave benefit of doubt to the government and thought perhaps the government would retrace its step. But everything that happened after November 19 proved the government was pressing ahead its agenda.”
When asked about Patel not taking a stand against demonetization, Chidambaram said: “Of course, he [Patel] was wrong. He should not have called a Board meeting in Delhi, a hurriedly called truncated Board meeting to pass a resolution endorsing demonetization. He should have stood his ground. He was wrong.”
He said, “He[Urjit Patel] suffered a huge reputational slide by endorsing demonetization and the RBI suffered reputational damage in the world. I don’t think RBI has recovered its reputation among the central banks of the world after demonetization.”
On the New Governor
Chidambaram expressed his “worries” over the appointed of Shaktikanta Das who was Modi government’s pointman on demonetization, “It worries me that they (government) have appointed two persons to two key posts, both of whom were vocal supporters of demonetization. It worries me.”
Hoping that Das would not succumb to pressure, he added, “I sincerely hope, and I would appeal to Mr. Shaktikanta Das, that you (Das) are now the RBI Governor. You are no longer ex-Secretary Economic Affairs, you are the Governor of the central bank of India. Therefore, you must stand up for the autonomy and rights of India’s central bank.”