Union minister Nitin Gadkari on Thursday defended the Centre and said that the Bharatiya Janata Party-led government had not destroyed the Reserve Bank of India as an institution, PTI reported. The BJP leader said the central bank is part of the government and has to support the economic vision of the government.
The remarks follow Urjit Patel’s resignation as the central bank’s governor and criticism that linked his decision with the growing rift between the RBI and the government over the past few months.
“Even if we accept RBI’s autonomy, it is the responsibility of the central bank to support the vision of the government,” Gadkari told a gathering at an event organised by the Times Group. “We have not destroyed it [RBI] in any way.”
He cited a scenario where “if the finance minister gives an economic vision for the country” the central bank is expected to “support that vision”.
On Wednesday, global rating agency Fitch said Patel’s resignation as RBI governor poses macroeconomic risks. Former Revenue Secretary Shaktikanta Das was appointed the head of the central bank on Tuesday, a day after Patel resigned.
In November, the Centre had reportedly proposed a change in rules that will enable it to supervise the central bank more closely. This came in the wake of speculation about a rift between the finance ministry and the RBI. Early last month, a few news reports claimed the Centre had sought Rs 3.6 lakh crore capital from the central bank. However, government officials clarified there was no such proposal.
Gadkari also said his party’s government was ready to “pay a political price” for stringent decisions taken in “the interest of the country”, such as demonetisation and the Goods and Services Tax regime.