RBI is a communal and anti-poor organisation!

While most news channels spent a lot of time talking about hike in CRR and repo rates, they ignored an equally important part of RBI announcement. As per RBI, "Early fiscal indicators point to some strains on the Centre's fiscal position which has worsened somewhat in relation to Budget estimates.” It further noted that in view of the growing off-budget liabilities and enhanced expenditures on subsidies, loan waivers and salaries in the rest of the year, fiscal deficit may go up. Consequently, fiscal developments warranted “close and careful monitoring” as it would have implications on inflation and external sector management, the report said.

Now when the Finance Minister announced this 60,000 Crore loan waiver in his budget speech without really budgeting for it, opposition parties were critical of this fudging. Arun Shourie in his piece in The Indian Express, quoted Manmohan Singh's 1991 speech about VP Singh Government's loan waiver, "There is one large component of non-plan expenditure that is a burden on the exchequer... I refer to the Government’s obligation under the Rural Debt Relief Scheme. Unfortunately, there was a gross under-estimation of the total fiscal liability under this scheme which was introduced last year. In addition to the sum of Rs. 1500 crores provided in the revised estimates for last year, we have to provide Rs. 1500 crores in the current year. But this is not all. We may need a similar provision in the next year". Now the Congress government was doing the same thing.

Chidambaram rather than assuring the nation and the parliament about where the money will come from, was stating that 'Trust me' - Shourie called it 'Main Hoon Na' budgeting. Congress spokesmen in debates in TV studios went on offensive proclaiming Congress to be the party of poor and BJP anti-poor, and some debates digressed into routine rants about the 'communal' BJP. No one ever told where would the money come from, and what would be the impact on the economy.

Now that RBI's assessment echoes the same things that the opposition had said about the FM's sleight of hand in budgeting, what would the Congress spokesmen say in a TV debate? 'Communal' and anti-poor' RBI?