"Outlandish": Finance Minister Dismisses Criticism Of RBI Payout

Tackling criticism of the Reserve Bank of India's decision to transfer a record Rs 1.76 lakh crore from its surplus and reserves to the government, Finance Minister Nirmala Sitharaman today described as "outlandish" any questions raised on the credibility of the committee that recommended it.

"This committee (Bimal Jalan Committee) is appointed by RBI, it had eminent experts in it, they gave a formula based on which the amount was arrived at, now any suggestions about credibility of RBI, therefore, for me seems a bit outlandish, considering the committee was appointed by the Reserve Bank themselves," Ms Sitharaman told reporters in Pune.

She was responding to a question on whether the RBI's international credibility rating 'AAA' could be affected as it has reduced its surplus by transferring the amount to the government.

The transfer, including a surplus of Rs. 1.23 lakh crore for 2018-19, will boost the government's finances at a time it strives to tackle a nearly five-year low economic growth with lakhs of estimated job cuts across sectors, and defend its ambitious target of containing fiscal deficit at 3.3 per cent of the GDP.

The transfer of surplus and excess dividend is in line with the recommendations of the Bimal Jalan Committee, which was tasked to review the Economic Capital Framework of the RBI.

Addressing concerns raised on the autonomy of Reserve Bank after its decision to transfer the huge amount to the government, Ms Sitharaman said, "Bimal Jalan Çommittee had eminent experts in it, was constituted by Reserve Bank itself and not by the government."

Among those who have slammed the move is Congress leader Rahul Gandhi, who said in a tweet: "PM and 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. #RBILooted."

Ms Sitharaman derided the comments. "Whenever Rahul Gandhi raises things like ''chor, chori,'' one thing comes to my mind. He tried his best ''chor, chor, chori'' but the public has given him a befitting reply. What is the point of using the same words again," she said, apparently referring to his attacks on Prime Minister Narendra Modi during the elections in connection with the Rafale fighter jet deal.

Ms Sitharaman said the government had not yet decided on how the funds would be utilised. "How the funds will be utilised I can't say right now. The government will take a decision and we will inform thereafter," the minister told reporters.