The Economic Affairs Secretary Subhash Chandra Garg on Friday refuted reports of a Finance Ministry proposal asking the Reserve Bank of India to transfer 3.6 lakh crore to the government saying that these were misinformed speculation in the media, and the government’s finances were right on track.
Garg categorically refuted the reported proposal to ask RBI to transfer Rs 3.6 or 1 lakh crore, saying that the only proposal that was under discussion by the government and the RBI was regarding fixing an appropriate economic capital framework of the RBI. This framework is used to decide the amount of reserves that the central bank should maintain.
Earlier this week, the Indian Express had reported that the alleged rift between the Centre and the RBI was because of a proposal by the Finance Ministry. This proposal sought transfer of surplus of Rs 3.6 lakh crore, that amounts to approximately one-third of the RBI’s reserves. The RBI was reported to be against the proposal.
The report had further claimed that the Centre in its stand for transfer had reasoned that RBI has over-estimated its capital reserves requirements resulting in the excess capital of Rs 3.6 lakh crore. The funds were to be given back to the government and their appropriate use would be decided in consultation with the RBI, another report had claimed.
These reports were further confirmed by former finance minister P Chidambaram who didn’t say it in clear words but alluded to the proposal saying that the rift between the RBI and the government was over a huge sum of money.