Nirmala Sitharaman brushes off Oppn criticism of RBI payout

Mangalore Today News Network

New Delhi, Aug 27, 2019 : Finance Minister Nirmala Sitharaman on Tuesday said questioning the credibility of the Reserve Bank of India (RBI) after it passed on surplus Rs 1.76 lakh crore to the government was “outlandish” and “worrying”, Hindustan Times reported.

 

The RBI decision came on Monday after the Bimal Jalan Committee constituted by it to determine excess capital submitted its report to the federal bank. The decision also signals the end of the discretionary power enjoyed by the RBI on dividend payouts. In the current fiscal, the RBI will pay out Rs 1.23 lakh crore of surplus and Rs 52, 637 crore of excess contingency provisions lying in its books.

Reacting to criticism, Sitharaman said, considering the fact that the committee was appointed by the RBI, any suggestions about bank’s credibility “seems a bit outlandish”. She was addressing a press conference after meeting GST officials in the city.

“Comments being offered on the credibility of RBI, I am afraid to say, are comments on the RBI and its selection on the committee and is a worrying sign,” said Sitharaman while responding to a question about further decline in the federal bank’s ratings if transfer of surplus was made.

The additional amount of Rs 86,000 crore that the government will receive this year above its budgeted Rs 90,000 crore as transfers from RBI could be either used to provide fiscal stimulus to a sagging economy, reduce off-balance sheet borrowings or meet the expected shortfall in revenue collections.

The minister also reacted sharply to former Congress president Rahul Gandhi’s allegations that the government was “stealing RBI’s reserves” and said she did not care about such charges. Earlier in the day, Gandhi had criticised the Centre over the record cash transfer from the RBI, saying that the prime minister and the finance minister were “clueless” about solving the “self-created economic disaster”.

The government has set a fiscal deficit target of 3.3% of the gross domestic product (GDP) for the current fiscal, revised downward from 3.4% pegged in the Interim Budget in February.

Referring to the announcements made by her last Friday to push growth, Sitharaman said that, starting October 1, 2019, all tax notices would be disposed off within three months from the date of reply.

Sitharaman also said she has directed the tax administrators to be restraint in the tax collection process and also asked them to understand the businesses.

She said that all the deadlines for tax collections have been decided in consultation with the authorities and, hence, these are not impossible to achieve.

On GST related issues, the Minister specifically said that there was no discussions on rate reductions for agricultural items.

Issues related to homebuyers were, however, discussed in the meeting.