BJP Slams Congress for ‘Institutional Abuse’ After Ex-RBI Governor Claims Being ‘Pressurised’ By UPA FMs

The Bharatiya Janata Party on Tuesday attacked the Congress party over former RBI Governor Duvvuri Subbarao’s claim that the finance ministry under Pranab Mukherjee and P Chidambaram used to pressurise the RBI. In his recent book ‘Just A Mercenary?: Notes from My Life and Career’, Subbarao has said that the finance ministry under Mukherjee and Chidambaram used to pressurise the RBI to soften interest rates and present a rosier picture of growth to shore up sentiments.

Slamming Congress, Union Minister Smriti Irani on Tuesday said it underscored the grand-old party’s penchant for deceit over national interest.

“When the grand-old Congress party wanted the Reserve Bank as the government’s cheerleader to hoodwink the people of India,” Irani said in a post on X, sharing a media report published on Subbarao’s claim in his memoir.

“The revelations from former RBI Governor Subbarao’s memoir provide a glaring instance of the institutional abuse perpetrated by the Congress. The misconduct not only endangered our institutions but also underscores Congress’s penchant for deceit over national interest, she charged. Instead of fostering a robust Indian economy, they chose to mislead our citizens, betraying their aspirations for a prosperous country. No wonder India plummeted into the fragile five economies during the UPA’s decade-long misrule and mismanagement,” she added.

Finance Minister Nirmala Sitharaman also took a swipe at Congress over the former RBI Governor’s claim and raised questions on the condition of the economy during the UPA regime.

“UPA FMs “…used to pressurise the central bank to…present a rosier picture of growth to shore up sentiments.” #JustAsking Aren’t we told that the economy was rosy during their period? Also, on respecting institutions: lectures only for others?” she posted on X.

BJP’s IT Cell Chief Amit Malviya also accused Congress of “falsely whining about lack of institutional integrity, when it is them, who destroyed every possible institution in this country.”

What Duvvuri Subbarao Said In His Book?

The former RBI governor in his memoir also wrote that there was ‘little understanding and sensitivity’ in the erstwhile government of the Congress-led United Progressive Alliance (UPA) on the importance of the central bank’s autonomy.

Subbarao was the finance secretary (2007-08) before taking over as the governor of the RBI for five years on September 5, 2008, a few days before the breakout of the Lehman Brothers crisis. Lehman Brothers crashed into bankruptcy on September 16, making it the biggest corporate failure in history.

In a chapter titled, ‘Reserve Bank as the Government’s Cheerleader?’, in his book, he recalled that pressure by the erstwhile UPA government was not confined to the Reserve Bank’s interest rate stance. On occasion, it extended to pressuring the RBI to present rosier estimates of growth and inflation at variance with our objective assessment.

“I remember one such occasion when Pranab Mukherjee was the finance minister. Arvind Mayaram, the finance secretary, and Kaushik Basu, the chief economic adviser, contested our estimates with their assumptions and estimates, which I thought was par for the course,” he wrote.

What upset him, Subbarao said, was that almost seamlessly the discussion moved from objective arguments to subjective considerations, with suggestions that the Reserve Bank must project a higher growth rate and a lower inflation rate in order to share responsibility with the government for ‘shoring up sentiment’.

“Mayaram went to the extent of saying in one meeting that ‘whereas everywhere else in the world, governments and central banks are cooperating, here in India, the Reserve Bank is being very recalcitrant,” he recalled. Subbarao said that he was invariably discomfited and annoyed by this demand that the RBI should be a cheerleader for the government.