Raghuram Rajan's comment on cash flows in poll-bound states grabs EC's attention

He had said Rs 50,000-60,000 cr in cash would increase with public in these states; EC seeks inputs from RBI

The Election Commission has decided to write a letter to the Reserve Bank of India (RBI) asking the banking regulator to share inputs, related to cash flow increases in states that are going for assembly elections in the country.

Media reports quoted RBI Governor Raghuram Rajan saying that it was estimated about Rs 50,000 crore to Rs 60,000 crore in cash would increase with public as a result of polls in four states and union territories.

The states which are going for election includes Tamil Nadu, West Bengal, Assam and Kerala. The Union territory include Puducherry.

Rajan was also quoted in media saying that the matter should be looked into.

Countering this view, the SBI Chairperson Arundhati Bhattacharya has said that the country has seen even bigger elections in earlier years, but the increase in currency with the public has not been that high, said reports quoting her. The spurt in cash this time is hurging the deposit growth and the deposit growth has come below advances, she was quoted.

Responding to which, the Chief Election Commissioner Nasim Zaidi said that in view of the statement made by the RBI Governor and the counter by SBI's Chairperson, the Commission has already taken up the matter to RBI.

Zaidi, who was in Chennai to take stock on preparations for the upcoming assembly elections in Tamil Nadu, told reporters that the Election Commission is writing a letter to the RBI and will engage with the banking regulator.

"We are requesting them to provide us inputs so that we can consider and examine and take appropriate actions. It is too early on the part of any person to draw any other conclusion," said Zaidi.

Media reports quoted Rajan saying that "we some (sic) possibility that around election time cash with public increases".

"We see that (surplus currency) not only in the states going for elections but also in the neighbouring states,'' he said. "There is something there. We need to understand it better," media reports quoted Rajan.

On preparations for May 16th polling in Tamil Nadu, Zaidi said he was satisfied with the preparations and he also said the Commission will provide a level playing field for all the parties. He also listed out the measures, including usage of IT, setting up special booths for women and for disabled, deployment of additional forces and others, for the upcoming assembly election in the State.

The Commission has launched a new campaign with a tag line saying 'My vote is not for sale' and said the election will be conducted in free and fair manner.

"Our strategy is to mitigate money power. There is a need to reduce this menace. The Commission deliberated on this issue extensively and decided to increase the number of expenditure observers seven fold."

He said unlicensed liquor bars will be closed and it will be ensured that they are not used for unlawful activities.

Further the IT department will cross check the asset details of the candidates declared in the affidavit with that of their IT returns.