Kolkata: Accusing the Centre of snatching the Reserve Bank of India's (RBI) autonomy, economist Abhirup Sarkar on Tuesday said that the central bank's decision to transfer Rs 1.76 lakh crore surplus to the central government would prove harmful for the economy in the long run.
"The basic objective of any government in power is to do something within five years of its tenure but institutions like RBI are there for the long term. If you take away their autonomy, then you will lose in the long run and it's very dangerous for the economy," he said.
Sarkar also said that the move would hamper the top bank's capacity to deal with fluctuations in the value of Rupee.
"RBI needs all this money for stablising both the external and internal sectors. Sometimes there are fluctuations in the value of rupee and the RBI needs huge fund to stabilise them. If there is a lack of liquidity, the RBI needs a lot of funds to restore the liquidity," he said.
"Now that the fund has been transfered to the government, the RBI will not have that option and that is really bad," he added.
On Monday, the Central Board of the RBI approved the transfer of Rs 1,76,051 crore to the government on the recommendation of a committee led by its former chief Bimal Jalal.
The amount includes Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF).
