New Delhi [India]: Accusing the government of “snatching RBI money”, the Congress on Tuesday said the country is being pushed towards “bankruptcy” and sought a white paper on the state of the economy.
Addressing a press conference at the party headquarters, Congress leader Anand Sharma said India is “now in the midst of the worst-ever financial crisis where the government is pushing the country towards bankruptcy because of its policies”.
He said, “We are charging this government with monumental mismanagement of the Indian economy…It is not a recession or a downturn, the situation is grim.”
Sharma said Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman “cannot remain in denial which they are. They are continuously deflecting public attention from real issues.”
On the Reserve Bank of India’s move to transfer Rs 1.76 lakh crore to the government, Sharma said, “Yesterday’s decision was a confirmation of what the party had been forewarning about the state of the economy”.
He said the RBI has taken an unprecedented decision of transferring its entire surplus in one go to the government and the decision will have catastrophic consequences.
“Tomorrow, if you have a global economic crisis, the RBI has no room left to intervene and help the Indian economy. This is how grave the situation is”, he said.
The Congress leader said except the Bimal Jalan committee, “which was set up after the government pressurised and pushed the Reserve Bank to give a part of its Contingent Risk Buffer (CRB)”, the suggestion to part with RBI’s reserves was resisted by former governors including Raghuram Rajan and Urjit Patel.
Sharma also made a veiled attack on RBI Governor Shaktikanta Das.
“Here there is an obliging, pliant RBI governor who has done what none of his predecessors was willing to do,” he said.
Sharma said the CRB has been brought to minimal level. “Below that you cannot go because RBI’s own standing as a central bank will collapse. Nobody is willing to accept 5.5 per cent shaving off 1.3 per cent of CRB. The government has done it out of sheer desperation. Its policies have brought the economy to ruin,” he noted.
Sharma said after the transfer from the RBI, there is nothing more for the bank to transfer because they have touched a red line.
He said people have fears about their own money in the banks now.
“One lakh (rupees) is guaranteed by the Reserve Bank. You may have Rs one crore in the bank but the government and the Reserve Bank will not give you more than Rs one lakh. It is a serious situation,” he said, adding there was a huge shortfall in revenue.
Sharma said there was a mismatch between the figures mentioned in the revised estimates of this year’s Budget and that in the economic survey and the shortfall was Rs 1.7 lakh crore. “That shortfall is exactly what the government seeks to meet by snatching away from the money from the central bank’s contingency reserve.”
He said industrial manufacturing has collapsed and the Indian rupee was continuously falling.
“Unemployment has soared to 8.2 per cent. The real unemployment in India is close to 20 per cent. Major industrial sectors are collapsing because of fall in consumption and demand,” he noted.
Sharma said the automobile sector is facing job losses. “The textile sector has run the alarm bell and agricultural distress was very well known.”
“All the engines of the Indian economy are just stuttering. We do not know how the take-off will take place. We demand that the government immediately come out with a white paper on the state of the economy. They will try to fudge data but they must do it (bring a white paper),” he said.
He said the government should also release a report on national data on parameters such as projects presently under progress, projects nationally in all sectors, public sector investments and private sector investments, credit off-take by MSMEs and by agri sector, electricity consumption in factories, exports scenario and the actual factory output.
He accused the government of stopping part of subsidy transfer. Sharma alleged that the government does not know the way forward.
“The condition is bad and they snatched RBI money and pushed the country towards the economic emergency. This is a serious issue,” he added.
He said GDP has been continuously falling and it was 5.8 per cent in the last quarter and the first quarter numbers cannot be more than 5.6 per cent which would be a seven-year low.
He accused Finance Minister Nirmala Sitharaman of “somersault on her budgetary announcements”.
Referring to her remarks about India’s growth rate in relation to China and the US, he said, “she is out of depth completely”.
“China is 15 trillion dollar economy and America is 23 trillion dollar economy. Please for heaven’s sake, don’t repeat this statement. India’s Finance Minister should not look less informed, I will not use a stronger word,” he said.