Respect RBI's credibility, PM tells Opposition

PM said his government has taken steps to preserve independence of RBI by constituting MPC

 

Prime Minister Narendra Modi on Wednesday appealed to the Opposition to contribute in preserving the institutional credibility of the Reserve Bank of India (RBI). The PM said it doesn’t behove dragging the institution and its governor, whether the current Governor Urjit Patel or his predecessor Raghuram Rajan. The PM pointed out that he had defended Rajan as well.

In his reply to the discussion on the motion of thanks to the President’s address, the PM defended the demonetisation decision. But the highlight of his over an hour long speech was a stinging attack on former Prime Minister Manmohan Singh, who was present in the House.

The motion of thanks was passed without any amendments, despite the government being in a minority in the Rajya Sabha. First the Congress and Samajwadi Party, its newfound ally in Uttar Pradesh, walked out to protest the “insult” Singh, and later other parties, including the Left, the Janata Dal (United) and Trinamool Congress also walked out.

In his speech, the PM said his government has taken steps to preserve the independence of RBI by constituting the monetary policy committee, or MPC. He said the Congress should look into the mirror before accusing his government of interference in the functioning of RBI. He quoted from the memoirs of former RBI Governor D Subbarao, who has written about how then Finance Minister P Chidambaram overstepped into the jurisdiction of RBI on the issue of liquidity management and kept him in the dark.

Of late, the Public Accounts Committee of Parliament, headed by Congress’ K V Thomas has asked the RBI Governor to answer its questions on demonetisation and the Opposition has also been critical of his role.

To the Communist Party of India (Marxist) chief Sitaram Yechury, the PM said how his party member Jyotirmoy Basu had demanded demonetisation in 1972, and later Harkishen Singh Surjeet had also repeated the demand in 1981. “We had expected that you would support us in this effort to curb black money,” Modi said, to which Yechury protested that his party disagrees in the manner the decision was implemented.

But the PM reserved his criticism for his predecessor. In the winter session of Parliament, Singh had criticised demonetisation as “organised loot” and “legalised plunder”. Modi asserted that the fight against black money is not a political one or against any party, but said Singh was at the helm of India’s economic decision-making for 30 to 35 years and during this period, several scams took place but there was not a blot on the former PM.

“So many scams occurred... We politicians have a lot to learn from Dr Sahab. So much happened, there is not a single blot on him. Dr Sahab is the only person who knows the art of bathing in a bathroom with a raincoat on,” he said.

Angry Congress members walked out of the House, but Singh indicated he would like to listen to the PM’s speech. However, senior Congress members asked Singh to join them and he eventually relented. Earlier in the speech, some Congress members had interrupted the speech with catcalls. 

To their protests, Modi said, “If you cross the limits of decorum, you should have courage to listen to the response. We have the capacity to pay in the same coin. We do so within the limits of decorum and boundaries of the Constitution. They (Congress) don’t want to accept defeat in any form. How long will it continue?”

He went on to add, “The person who held such a high post, used the words ‘loot’ and ‘plunder’ in the House. Then they (Congress) also should have thought 50 times (before using those words).”

The Prime Minister also took on the Congress for quoting economists to denounce demonetisation. “You are quoting economists. If you quote 10, I can quote 20. Economists have never seen such a step anywhere in the world, as this has happened for the first time... In fact, this can become a case study for them,” he said.

Modi also quoted from a book authored by former Home Secretary Madhav Godbole, which, he said, contained criticism of Indira Gandhi for not undertaking demonetisation in 1971 when there was an opportunity.

On criticism by Opposition members that people were facing hardship because of demonetisation, the Prime Minister said there will be “problems, while finding a way out of vices”.

“There is a horizontal divide in the country... The public sentiment is on one side, while the sentiments of leaders are on the other. They (Opposition parties) are disconnected from public sentiment,” he said.