Amid strong buzz that RBI governor Urijit Patel will step down over differences with the central government over interference, there is controversy as the section has never been invoked before.
The Modi government came under severe attack from the Opposition after it came to light that it has invoked Section 7 of the Reserve Bank of India Act to issue directives to the apex financial body.
Amid strong buzz that RBI governor Urijit Patel will step down over differences with the central government over interference, there is controversy as the section has never been invoked before.
Former finance minister and senior Congress leader P Chidambaram tweeted that if the government has invoked Section 7, then there will be "more bad news today". "We did not invoke Section 7 in 1991 or 1997 or 2008 or 2013. What is the need to invoke the provision now? It shows that government is hiding facts about the economy and is desperate," Chidambaram tweeted.
He further asked what was the need for the government to issue a statement that it held 'consultations' with RBI. "Obviously, the government has concealed something. The buzz is that government has recently written one or more letters to the RBI. Will government say whether such letters have been written and whether the letters specifically refer to Section 7 of the RBI Act," he said in a series of tweets.
CPM leader Sitaram Yechury also said that the Modi government is damaging every institution. "Judiciary, Parliament, CBI... and now RBI. Modi govt has tried to damage every single institution. Now, this attempt to hold institutions responsible for the mess, is a desperate bid to transfer blame for his utter failure of last 4.5 years," Yechury tweeted.
Senior leader Ahmed Patel, too, said that institutions that successive governments had helped build over last 70 years are now being systematically dismantled by the present government. "Their inherent objective is to extinguish any kind of autonomy beyond their realm. The existence of this govt is a grave challenge to democracy," Patel tweeted.
On Monday, party president Rahul Gandhi had also tweeted on the issue and said, "Nice that Mr Patel is finally defending the #RBI from Mr 56. Better late then never. India will never allow the BJP/ RSS to capture our institutions."
The Modi government also faced flak from within its own as former NDA finance minister Yashwant Sinha, said, "High time the people woke up to these surgical strikes against our own institutions. If indeed govt has issued directives to the RBI then its governor should resign forthwith."
BJP leader Subramanian Swamy, who has been a vocal critic in the matter, also let his disappointment known. "If RBI governor resigns then it is a direct consequence of FM blaming him publicly yesterday for NPAs. Patel is a self respecting scholar of economics(Ph.D in Banking from Yale). He should be persuaded to stay," he said.
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