New Delhi, Oct 31 (IECurrentAffairs) Amid buzz of the National Democratic Alliance Government invoking section 7 of the Reserve Bank of India Act which gives it powers to issue directions to the central bank in matters of public interest, the Indian National Congress on Wednesday said it would oppose any assault on the independence of institutions.
Briefing media here, AICC spokesman Manish Tewari, reacted to reports that the NDA Government had invoked section 7 of the RBI Act. He said ‘The NDA Government is bent on destroying institutions on which the Republic of India stands. Prime Minister Narendra Modi and Finance Minister Arun Jaitley have trained their guns on the RBI. Provisions of section 7 are imposed only if there is an exceptional financial emergency that emtails public interest.
”In seven decades since Independence, section 7 has never been invoked despite serious financial issues. Even when the economic meltdown took place, the then United Progressive Alliance dispensation did not even remotely consider invoking the section. We would like to ask the Finance Minister as to what is the overriding emergency that is impelling you to play havoc with the RBI.’
He said that the Congress would vehemently oppose any attempt to assault institutions..
‘The Government will not be allowed to assault independence of institutions. The Congress will strongly oppose it,’ Mr Tewari averred.
Earlier in the day, former Union Finance Minister P Chidambaram, expressing concern over reports that the government had invoked Section 7 of the RBI Act and issued unprecedented ‘directions’ to the central bank, said it implies that facts regarding the economy have been concealed. The government is hiding facts about the economy.’
In a series of tweets, the senior Congress leader stated ,’ If, as reported, Government has invoked Section 7 of the RBI Act and issued unprecedented ‘directions’ to the RBI, I am afraid there will be more bad news today. We did not invoke Section 7 in 1991 or 1997 or 2008 or five years ago. What is the need to invoke the provision now? It shows that government is hiding facts about the economy and is desperate.’
Reports said that the government has invoked section 7 of the RBI Act allowing it to issue directions to the central bank governor on matters of public interest.
The development lends a new dimension to the ongoing skirmish between the RBI and the Modi government. Section 7 of the RBI Act empowers the government to consult and give instructions to the central bank governor to act on certain issues that it considers in public interest.