Modi government planning demonetisation part-2: Congress

New Delhi: Launching a scathing attack on Prime Minister Narendra Modi, the Congress on Monday said that the Central government is planning a 'demonetisation part-2' by forcing the central bank to part with a large chunk of its reserves.

"Modi-made disaster of demonetisation shaved off 1.5 per cent of India's GDP and severely denigrated the institutional autonomy of the RBI. Now, the Modi government is planning demonetisation part-2 by coercing the RBI to pay a special dividend of Rs 3.6 lakh crore," Congress spokesperson Abhishek Manu Singhvi told reporters here.

Economic Affairs Secretary Subhash Chandra Garg, however, dismissed the reports which said that the government had sought Rs 3.6 lakh crore from the RBI reserves as 'misinformed speculation'. He said "Country's fiscal deficit target was on track."

He, however, said that the proposal under discussion between the government and the Reserve Bank of India was to fix "appropriate" economic capital framework of the RBI.

Singhvi questioned the need to fix the RBI's capital framework.

"The Modi government has come forth with a bunkum and bogus argument that it wants to fix the economic capital framework of the RBI," he said.

"What is the meaning of 'fix appropriate economic capital framework of RBI' which is being discussed by the government? What is the need of this quick-fix solution, which will further deteriorate the contingency stability," asked Singhvi.

He said that the move will shave 2 per cent off India's GDP.