Modi government trying to capture RBI ahead of LS poll: P Chidambaram

New Delhi: Senior Congress leader and former Finance Minister P Chidambaram on Thursday said that the Modi government is trying to capture RBI ahead of Lok Sabha polls, stating that this will be catastrophic.

He also alleged that the government has packed the RBI board with handpicked nominees, and was making every attempt to push through its proposals at the RBI board meeting on November 19.

Chidambaram has constantly been accusing government of trampling on the RBI's autonomy with its interference, ever since the alleged rift between the Central bank and government came in public domain.

The rift between the RBI and the government has spilled into the public domain after Deputy Governor Viral Acharya said last month that undermining central bank independence could be "potentially catastrophic", indicating the authority is pushing back against government pressure to relax its policies and reduce its powers ahead of a general election due by May.

Recently, the government cited never-used before provisions of law that gives it powers to issue directions to the RBI on mattes of public interest to resolve certain issues.

Chidambaram had Slammed the government for using this power on RBI, alleging that the BJP dispensation is “hiding facts” about the economy and is desperate.

The senior Congress leader said that the governments he was a part of in the past had never used Section 7 of the Reserve Bank of India Act of 1934, under which a direct order can be issued by the government to the central bank to carry out its wishes in “public interest”.