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RBI, govt truce: Sena says it’s like today’s death postponed till tomorrow

Taking a swipe over the rift between the RBI and the Centre over some issues followed by a temporary truce, the Shiv Sena on Wednesday said that it was like today’s death being postponed till tomorrow.

The Reserve Bank of India’s (RBI) board had held a marathon meeting on Monday over several issues, including how much capital the apex bank needs, lending norms for small and medium enterprises and rules for weak banks.

Signalling a temporary truce, the RBI and the government had agreed to refer to an expert committee the contentious issue of the appropriate size of reserves that the apex bank must hold, while restructuring of stressed loans of small businesses would be considered by the central bank.

“Fortunately, the government took a step back and the RBI also adopted a middle path. Therefore, a showdown has been temporarily averted for now.

“The RBI has decided to form an expert committee over utilising its reserves. This, some feel, is like today’s death postponed until tomorrow,” the Sena said in an editorial in party mouthpiece ‘Saamana’.

It also said that the micro, small and medium enterprises (MSME) sector was under stress due to demonetisation, and that it also had a cascading effect on sectors like services and production.

This led to slackness in buying and selling as well as a decrease in liquidity, the Uddhav Thackeray-led party claimed.

“The GST only increased problems for these sectors. The MSME sector has come under stress today only due to the policies of this government. Though the UPA government was responsible for Rs 10 lakh crore worth debts of large companies, how can the previous government be held responsible for the stress in the MSME sector today?” the editorial asked.

The government has probably understood that it was its own doing which caused ruining of the MSME sector and therefore, made the policy to ease lending norms for them and sought the use of RBI’s reserves, said Sena, which is an ally of the BJP at the Centre and in Maharashtra.

“The rift between the government and the RBI started because the former sought to use the latter’s reserves, as decisions like demonetisation have tightened the noose around the MSME sector and the government now wants to free it,” it added.

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