Union Minister Smriti Irani criticized the Congress on Tuesday, citing the ancient party’s “penchant for deceit” over the good of the country in response to former RBI Governor Duvvuri Subbarao’s assertion that the finance ministry under Pranab Mukherjee and P Chidambaram used to exert pressure on the RBI.
Recently published, “Just A Mercenary? According to Mr. Subbarao’s book “Notes from My Life and Career,” the finance ministry led by Mr. Mukherjee and Mr. Chidambaram once exerted pressure on the RBI to lower interest rates and paint a more positive picture of growth in order to boost public sentiment.
In his memoir, the former governor of the Reserve Bank of India stated that the previous United Progressive Alliance (UPA) government, led by Congress, had “little understanding and sensitivity” regarding the significance of the central bank’s autonomy.
“When the Congress party, the grand old one, wanted the Reserve Bank to be the government’s cheerleader and deceive the people of India,” Ms. Irani wrote on X, referencing a media article that highlighted Subbarao’s memoir claim.
When the erstwhile Congress party desired the Reserve Bank to serve as the government’s cheerleader and deceive the Indian populace
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The disclosures made in the memoir of former RBI Governor Subbarao offer a stark example of the institutional abuse committed by the
— Smriti Z Irani (Modi Ka Parivar) (@smritiirani) April 16, 2024
“The disclosures made in the memoir of former RBI Governor Subbarao offer a stark example of the institutional abuse that the Congress has committed. The misbehavior exposed Congress’s preference for dishonesty over the interests of the country, she said, endangering our institutions as well.
“They betrayed their hopes for a prosperous nation by misleading our people instead of promoting a strong Indian economy.” It makes sense that under the UPA’s ten years of mismanagement and misrule, India’s economy collapsed into the vulnerable five,” she continued.
A few days before the Lehman Brothers crisis broke out, on September 5, 2008, Mr. Subbarao assumed the position of governor of the RBI for a five-year term. He served as finance secretary from 2007 to 2008.
On September 16, Lehman Brothers filed for bankruptcy, becoming the largest corporate failure in history.
Mr. Subbarao noted that pressure from the previous UPA government extended beyond the Reserve Bank’s interest rate policy in a chapter of his book titled “Reserve Bank as the Government’s Cheerleader.” It sometimes went so far as to coerce the RBI into releasing more optimistic growth and inflation projections that contradicted the bank’s unbiased analysis.
“I recall one such instance from Pranab Mukherjee’s tenure as finance minister. The chief economic adviser Kaushik Basu and the finance secretary Arvind Mayaram challenged our estimates with their own estimates, which I felt was standard procedure, “he wrote.
The suggestion that the Reserve Bank should project a lower inflation rate and a higher growth rate in order to share responsibility with the government for “shoring up sentiment” inflamed Mr. Subbarao, as the discussion had moved almost seamlessly from objective arguments to subjective considerations.
“In one meeting, Mr. Mayaram even went so far as to say that the Reserve Bank of India is being very recalcitrant, while governments and central banks around the world are cooperating,” he recalled.
Mr. Subbarao stated that he was consistently uncomfortable and irritated by the insistence that the RBI support the government.
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