Finance Ministry Dismisses Charge of Seeking Rs 3.6 Lakh Crore From RBI, Says 'Govt's Fiscal Math on Track'
File image of the Reserve Bank of India | (Photo Credits: PTI)

New Delhi, November 9: Responding to the reports and allegations from Opposition parties that the Centre is seeking Rs 3.6 lakh crore from the Reserve Bank of India to meet its public expenditure in crucial election year, the Finance Ministry said such speculations are "misinformed".

The row which has erupted between the RBI and the government is not linked to cash reserves, but to fix an appropriate economic capital framework of the central bank, said Economic Affairs Secretary Subhash Chandra Garg. Modi Government Trying to 'Capture RBI' Ahead of Lok Sabha Polls, This Will Be 'Catastrophic': P Chidambaram.

“Lot of misinformed speculation is going around in media. Government’s fiscal math is completely on track. There is no proposal to ask RBI to transfer Rs 3.6 lakh crore, as speculated,” Garg tweeted.

His clarification comes a day after former finance minister P Chidambaram accused the government of seeking additional cash to meet the expenditure for various public schemes ahead of the elections next year.

Since the RBI Governor Urjit Patel has exercised his autonomy and refused so far, the government was forced to invoke the never-before-used provision of Section 7 in the RBI Act, Chidambaram said

Under this provision, the central bank has to accept the directions issued by the government, after consultation with the Governor.

"Modi government is trying to capture the RBI to access funds ahead of the parliamentary polls," Chidambaram alleged, adding that November 19 will be a "day of reckoning" when the Governor will have only two options: either to resign or give-in to government's demand.

The Congress veteran further claimed that Patel has refrained to release additional cash reserves to the Centre, as it would further deteriorate the fiscal deficit.

Reverting to this charge, the Economic Affairs Secretary said the government's "fiscal math is on track", and will achieve the target set for the financial year ending in April 2019.

“Government’s FD (fiscal deficit) in FY 2013-14 was 5.1%. From 2014-15 onwards, the Government has succeeded in bringing it down substantially. We will end the FY 2018-19 with a fiscal deficit of 3.3%. Government has actually foregone 70,000 crore of budgeted market borrowings this year,” he said.