Government Vs RBI: The Finance Ministry has tired silence, 'the autonomy of the Reserve Bank is necessary'
However, it was not mentioned in the statement that the government has not used Section 7 of the RBI Act to give instructions to Governor Urjit Patel regarding disagreement with the Reserve Bank.
New Delhi: The government has given a major statement amid reports of a dispute between the RBI and the government. According to a statement issued by the Finance Ministry, autonomy is necessary and acceptable condition for the operation of the Reserve Bank. The need for public interest and the economy provides direction to the Reserve Bank and the Government. There is a continuous consultation from time to time. However, it was not mentioned in the statement that the government has not used Section 7 of the RBI Act to give instructions to Governor Urjit Patel regarding disagreement with the Reserve Bank.
The Finance Ministry said, "The government never made the issues of those discussions public, only the people are told about the final decision. The government evaluates issues through these discussions and about possible measures. The government will continue to do so. "
It is noteworthy that the government had mentioned the authority that has never been used till date in relation to some issues with the Reserve Bank. According to sources connected with the case, the government mentioned Governor Urjit Patel under directive under Section 7 of the Reserve Bank Act.
Sources said that the government has mentioned Section seven on different issues at least three times. However, he had clarified that the government has not taken any decision under this special section. Section seven of the Reserve Bank Act provides this privilege to the Central Government that it may direct the governor to the central bank in view of public interest in case of disagreement. The Government disagrees with the Reserve Bank on the issues relating to the Accelerated Corrective Action (PCA) framework to liquidity management.
Former finance minister and senior Congress leader P. Chidambaram said in the tweet about the ongoing controversy that if the government used Section seven of the Reserve Bank Act, more bad news would come in the coming time.
He said that the predecessor governments did not use it during the liberalization of the economy in 1991, the Asian financial crisis of 1997 and the global economic recession of 2008. He said that if news of the use of Section 7 is correct, then it shows that the present government wants to hide the facts related to the economy.
New Delhi: The government has given a major statement amid reports of a dispute between the RBI and the government. According to a statement issued by the Finance Ministry, autonomy is necessary and acceptable condition for the operation of the Reserve Bank. The need for public interest and the economy provides direction to the Reserve Bank and the Government. There is a continuous consultation from time to time. However, it was not mentioned in the statement that the government has not used Section 7 of the RBI Act to give instructions to Governor Urjit Patel regarding disagreement with the Reserve Bank.
The Finance Ministry said, "The government never made the issues of those discussions public, only the people are told about the final decision. The government evaluates issues through these discussions and about possible measures. The government will continue to do so. "
It is noteworthy that the government had mentioned the authority that has never been used till date in relation to some issues with the Reserve Bank. According to sources connected with the case, the government mentioned Governor Urjit Patel under directive under Section 7 of the Reserve Bank Act.
Sources said that the government has mentioned Section seven on different issues at least three times. However, he had clarified that the government has not taken any decision under this special section. Section seven of the Reserve Bank Act provides this privilege to the Central Government that it may direct the governor to the central bank in view of public interest in case of disagreement. The Government disagrees with the Reserve Bank on the issues relating to the Accelerated Corrective Action (PCA) framework to liquidity management.
Former finance minister and senior Congress leader P. Chidambaram said in the tweet about the ongoing controversy that if the government used Section seven of the Reserve Bank Act, more bad news would come in the coming time.
He said that the predecessor governments did not use it during the liberalization of the economy in 1991, the Asian financial crisis of 1997 and the global economic recession of 2008. He said that if news of the use of Section 7 is correct, then it shows that the present government wants to hide the facts related to the economy.
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