Govt's move to take charge of monetary policy is ominous: Congress

Sharpening its attack on Finance Minister Arun Jaitley, the Congress on Tuesday accused the government of trying to destroy autonomous institutions like the Reserve Bank of India and alleged him of interfering in the work of the central bank.

"I have been surprised today by the sharp attack of the Finance Minister on the RBI and its performance. The central bank is independent and autonomous," Congress leader Anand Sharma told reporters here.

He said that it was in the interest of India and the economy that the RBI alone remains the regulator for the banks for the lending, borrowings and fixes the rates for the banks.

"Only the RBI must have the powers to regulate the public sector banks and none else. This government has ignited a fire through its repeated interference from day one. And now government's move to take charge of the monetary policy is a very ominous move," he said.

"It (attack on RBI) cannot be accepted. It must be opposed. Government being the spending authority, cannot become the monetary authority for the country. Equally important is to remember the role of the RBI as the payment regulator cannot be diluted or taken away by a government-nominated body," the Congress leader said.

His remarks came soon after Jaitley on Tuesday held the central bank responsible for the mountain of bad loans, saying the RBI looked the other way when banks lent indiscriminately during 2008-14 to keep the economy humming.

"Under Modi and BJP, they are damaging all the independent institutions of the country which have their role in maintaining governance and administration like CBI, ED, IT, DRI, Central Universities and many others," he said.

"I want to make one thing very clear today to Jaitley, since he specifically commented from the year 2008. Very eminent Governors of the RBI, far more competent than Jaitley or Prime Minister Narendra Modi, were there. And that time also the country had the benefit of an eminent economist of unimpeachable integrity in Manmohan Singh as country PM," he said, adding 2008 was the year when the big financial crisis enveloped the global economy.

"The RBI played a stellar role. It ringfenced the Indian economy and the big economies across the globe took note of the functioning of the RBI," he said. Even in other big countries, their central banks could not effectively ringfence their economy as the RBI did in India," Sharma said.

Criticising Jaitley for insulting the RBI, he said, "Today, Jaitley saying that the RBI is not competent, not capable, is the most unfortunate thing. I demand Jaitley take his words back and apologise for insulting RBI."

He said that it was not the first time that the government tried to interfere in the work of the RBI. "The first example the entire world saw was on November 8, 2016 (demonetisation) when 85 per cent currency was invalidated by the Prime Minister," he said.

"That was the first biggest attack on RBI when it was forced in a boardroom to take that step," he alleged.

The Congress leader described Modi and Jaitley as incapable leaders and said, "they have damaged the economy. They have no thinking, and they have wrong policies and wrong direction."

Slamming the government over the depreciating value of the Rupee, Sharma said, "On the one hand they say that we have the fastest growing GDP and economy and on the other hand there is no investment in the economy, industries shutting down and no employment generation and the rupee value depreciating.

He said that the Indian rupee has lost 16 per cent since January 2018. "And the Prime Minister is busy talking about all matters which are irrelevant and not paying attention to what he and his Finance Minister have proved to be not only inefficient but thoroughly incompetent when it comes to managing of the economy, which has been nose-diving."

"What explanation they have, fastest economy, there is a grave contradiction and the worst performing currency in Asia.

"Therefore we demand from this government to desist from destroying another autonomous institution, to retrace their steps and engage in dialogue and consultations rather than seeking to justify what is wrong and unjustified," Sharma added.