The Hindu : New Delhi News : Amar Singh seeks probe into RBI Governor's remarks

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Wednesday, Feb 09, 2005

New Delhi

New Delhi

Amar Singh seeks probe into RBI Governor's remarks

By Our Special Correspondent

NEW DELHI, FEB. 8 . The Samajwadi Party (SP) general secretary, Amar Singh, has demanded a probe into the Reserve Bank of India Governor, Y.V. Reddy's remarks on imposition of tax on foreign institutional investment (FII). "His statement resulted in the stock market crashing further on January 12, 2005," Mr. Singh said.

Releasing copies of the letter he had written to Major General B.C. Khanduri, chairman of the Parliamentary Standing Committee on Finance, he said: "If any corporate had behaved in this manner there would have been a high-level inquiry. The stock exchanges plummeted after Mr. Reddy's statement and the Finance Minister, P. Chidambaram, had to intervene to save the situation."

Mr. Singh charged the RBI Governor with behaving in an irresponsible manner. "Had the Finance Minister not intervened and initiated damage control measures, the bottom of the already plummeting stock market would have surely blown and the majority of the investors would have suffered unimaginable losses. Many small investors too would have been completely wiped out."

Mr. Singh was critical of the Finance Minister too. He pointed out that though he had written to Mr. Chidambaram, he was yet to receive an acknowledgement. "This despite the fact that I am also a member of the standing committee on finance."

The SP leader described the development as a classic case of the right hand not knowing what the left doing, and called on the chairman of the standing committee to ensure that such incidents were not repeated in future. "There should also be a discussion on the issue in the finance committee," he said.

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