New Delhi, Former Finance Minister P. Chidambaram expressed concern on Wednesday over reports that the government had invoked a hitherto unused section of the RBI Act to direct the central bank to act at its bidding, saying it shows the government is “desperate” and “hiding facts” about the economy.
“If, as reported, government has invoked Section 7 of the RBI Act and issued unprecedented directions to the RBI, I am afraid there will be more bad news,” Chidambaram said in a series of tweets.
He said the Congress governments did not invoke Section 7 in 1991 or 1997 or 2008 or 2013. “What is the need to invoke the provision now? It shows that government is hiding facts about the economy and is desperate,” Chidambaram maintained.
Section 7 of the RBI Act, 1934 allows the government to issue directions to the RBI, after consultation with the Governor of the bank, on issues of public interest.
The Congress leader’s remarks came amid reports suggesting that the government has invoked Section 7 of the RBI Act that empowers the government to consult and direct the RBI to act on issues that it considers necessary in public interest.
Former Finance Minister Yashwant Sinha, who is also a critic of the Narendra Modi government, attacked the government alleging it was hell-bent on destroying all the institutions of the country.
“After CBI it is the turn of RBI. The government is hell-bent on destroying all the institutions of our country. High time the people woke up to these surgical strikes against our own institutions,” the former BJP leader said in a series of tweets.
“If indeed government has issued directives to the RBI, then its governor should resign forthwith,” Sinha added.
Congress leader Anand Sharma also slammed the government and described it as an assault on RBI autonomy by a reckless government.
Sharma in a series of tweets said, “Assault on RBI autonomy by a reckless government is disturbing and deserves to be condemned.”
“In its dying days government has embarked on a mission to destroy institutional framework painfully built over decades,” Sharma said.
Meanwhile, Congress leader Manish Tewari said: “You have had serious financial crisis in this country – 1991 and 2008 are just two of recent examples, but even when the economic meltdown took place, the then UPA government did not even remotely consider invoking Section 7 or any other mechanism,” Tewari said.
“We would like to ask the Finance Minister that what is the over-riding emergency that is impelling you to absolutely play havoc with the autonomy of the RBI,” he said.
He said maturity was completely missing in this government.
However, facing criticism for invoking a hitherto unused section to issue instructions to the RBI, the government in a statement said that it respected the autonomy of the central bank but within the framework of the RBI Act.
