‘Stealing from RBI won’t work,’ says Rahul Gandhi on Centre borrowing ₹1.76 lakh crore from the central bank

Stepping up attack on the Centre over economic slowdown, Congress leader Rahul Gandhi today said Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman are clueless about how to solve “self created economic disaster” and that the borrowing from the RBI won’t help.

“PM & FM are clueless about how to solve their self created economic disaster. Stealing from RBI won’t work - it’s like stealing a Band-Aid from the dispensary & sticking it on a gunshot wound,” Gandhi said in a tweet.

The Rahul Gandhi’s tweet attack came after the report that the government will receive a 1.76 trillion-rupee ($24.4 billion) windfall from the central bank, which it may use to cut borrowings and recapitalize banks to help spur economic growth.

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The Reserve Bank of India’s board approved the record payout on Monday, which includes a dividend of 1.23 trillion rupees and 526.4 billion rupees from its surplus capital, according to a statement. The dividend payment includes 280 billion rupees already transferred to the government in February.

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The surplus transfer was finalised in line with the recommendations of the committee under former central bank governor Bimal Jalan. RBI’s central board accepted all the recommendations of the committee.

Last week, Finance Minister Nirmala Sitharaman announced a slew of measures to help the economy, including bringing forward a ₹71,500 crore ($10-billion) liquidity lifeline for credit-shy banks and rolling back an extra levy on equity sales that had spooked foreign investors.

Prime Minister Narendra Modi-led NDA government has come under increasing pressure to fire the economy, which has slowed in each of the past three quarters -- losing its status as the world’s fastest growing -- with unemployment hitting its highest level since the 1970s.

The auto sector has been particularly badly hit, with car sales plunging in July for the ninth month running, while weak consumer spending has hit demand for everything from biscuits to hair oil.

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Investors are keenly awaiting more measures from the government to prop up the flagging economy which is likely to have expanded at its slowest pace in more than five years in the April-June quarter, driven by weak investment growth and sluggish demand.