'Outlandish' to question Jalan panel's credibility: Sitharaman

Pune, Aug 27 (IANS) Finance Minister Nirmala Sitharaman on Tuesday hit out at criticism of the Bimal Jalan panel's recommendations on the RBI's Economic Capital Framework (ECF) for the central bank to transfer Rs 1.76 lakh crore to the government.

Speaking to mediapersons here following a meeting with income tax officials, Sitharaman said that any questions raised about the Reserve Bank of India's (RBI) credibility in wake of Jalan panel's report is "outlandish".

"The Bimal Jalan committee had eminent experts in it. It was constituted by the RBI themselves and not by the government. They have had several sittings and have come out with a formula to look at the excess capital framework. Now any suggestion about the credibility of RBI, therefore, for me seems a bit outlandish considering the committee was appointed by RBI themselves", she said.

"They (RBI) have themselves given the explanation that financial stability, surplus to meet any emergency and contingency have all been factored in when the committee arrived at the formulations. So comments being given on the credibility of the RBI is commenting on the RBI itself, their selection of the committee and the committee independently arriving at a formula.

"Its very worrying that a committe appointed by the RBI of experts, who have had several meetings and have come with a formulation, is now being questioned," she added.

On Monday, the RBI central board accepted the recommendations of the Bimal Jalan panel on capital transfer and decided to pay the government Rs 1.76 lakh crore for the current fiscal, which decision ended a year of disagreement on this issue between the government and the central bank.

The decision also signals the end of the discretionary power enjoyed by the RBI on dividend payouts. In the current fiscal, the RBI will pay out Rs 1.23 lakh crore of surplus and Rs 52, 637 crore of excess contingency provisions lying in its books.

--IANS

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