There is no proposal from the Indian government to ask the nation's central bank to transfer its surplus reserves, said Subhash Chandra Garg, economic affairs secretary in the finance ministry, in a tweet on Friday.
SC Garg, Department of Economic Affairs (DEA) Secretary, said, "Lot of misinformed speculation is going around in media".
Officials, however, say that the government is instead looking for a review of the framework which governs the RBI's balance sheet.
Garg added that the government was in discussions with the central bank only to fix its appropriate economic capital framework.
"The government stares at a fiscal-deficit crisis".
Besides, it has also been pointed out that the government wants the RBI to part with most of its profit as dividend.
Recently, Congress president Rahul Gandhi had attacked Prime Minister Narendra Modi over a media report which claimed the government is seeking Rs 3.6 lakh crore from the Reserve Bank of India (RBI), alleging that he needs the amount to fix the "mess his genius economic theories" have created. "The Government's FD in FY 2013-14 was 5.1 percent". From 2014-15 onwards, the government has succeeded in bringing it down substantially.
If RBI Governor Urjit Patel stands his ground, the Centre was planning to issue a direction under Section 7 of the RBI Act, 1934, directing the apex bank to transfer Rs 1 lakh crore to the government's account, he had claimed. "No government in the past had asked for the reserve in RBI".
In conclusion, at the end of the meeting, the RBI noted, "The Board was assured that the Government will take mitigating measures to contain the use of cash".
There have been reports that the Centre has already thrice asked the RBI to transfer Rs 3.6 lakh crore from its reserves. Either the RBI gives in or the Governor resigns.
Talking to reporters in Guwahati, the senior Congress leader said it is clear that the BJP has no understanding of the role of the central bank and no respect for the independence of its governor.
The RBI and the government have not been on the same page on different issues for some weeks now.
Anticipating that this would be a friction point anytime, the RBI explained the broad approach behind this framework in its annual report for 2015-16 by saying that the idea behind it is to build sufficient financial resilience.
This comes as yet another giveaway as the elementary interpretation of "appropriate economic capital framework" is fixing a suitable norm for surplus reserve. The RBI had made a dividend payout of Rs 30,659 crore for the fiscal ended June 2017.
"The NDA government has completed 4 years and 6 months of its term".