Pune: Finance Minister Nirmala Sitharaman on Tuesday hit out at criticism of the Bimal Jalan panel's recommendations on the RBI's Economic Capital Framework for the central bank to transfer Rs 1.76 lakh crore to the government and said it will provide ammunition to fight an ever-widening economic slowdown.
Given the expected revenue shortfall in a slowing economy especially against the aggressive targets set by the Finance Minister's maiden Budget presented last month, the windfall from the RBI may be used to trim borrowing, help fund Rs 3.3 lakh crore capex plan, capitalize banks and provide fiscal stimulus to some stressed sectors, experts and economists said. According to them, the windfall from RBI — the budget had pegged only Rs 90,000 crore as dividend — can be used to prop up the sagging economic growth.
She also called it "outlandish" to question the credibility of the Reserve Bank which had formed the Bimal Jalan panel with eminent experts.
Without explicitly mentioning the Rafale controversy, Sitharaman said the Congress is used to making allegations of stealing or calling someone a thief and wondered why it persists with it despite the electoral drubbing.
Earlier in the day, Congress leader Rahul Gandhi hit out at the government over the record cash transfer from the RBI.
On the former RBI Governor Raghuram Rajan's comments in December 2018 on the likelihood of the RBI's rating getting downgraded if its excess capital is carved out, Sitharaman said the Jalan panel was appointed by the RBI itself, with eminent experts and met several times before arriving at its conclusion.
It can be noted that the RBI's excess reserves had become a thorny issue between the RBI and the government last year.
Former Governor Urjit Patel and his deputy Viral Acharya, who quit separately before their terms ended, were opposed to part with the reserves and had also found support from Rajan.
However, Sitharaman said the government is yet to decide on what to do with the money.