New Delhi, Nov 21 (IANS): Picking on Prime Minister Narendra Modi's remarks that demonetisation was a "bitter" medicine to get rid of black money, Congress leader P. Chidambaram on Wednesday said it destroyed the Micro, Small and Medium Enterprises (MSME) and now the government wanted RBI to revive the sector.

The former Finance Minister also took strong exception to remarks reported in the media of an unnamed government functionary who had said that government had acquired primacy on policy matters vis-a-vis the Reserve Bank of India.

"The truth, Mr Prime Minister, is that you used note ban as a 'tez' (bitter) medicine to destroy MSME. Now, government wants RBI to revive that sector!" Chidambaram said in a tweet.

He was referring to Modi's remarks on demonetisation at a public meeting in Madhya Pradesh on Tuesday.

"The functionary who said 'on policy matters government has acquired primacy and this is how things were always supposed to be in a democracy' knows nothing about central bank's independence or democracy," he added.

The RBI board on Monday decided to form an expert committee to examine the economic capital framework of the central bank to decide the amount of reserves it can maintain, handing over the balance to the government.

The board also considered other issues related to the liquidity crunch in the economy and decided that the matter of relaxing the Prompt Corrective Action (PCA) norms to clean up the balance sheet of banks burdened with bad loans will be looked into by the RBI's Board for Financial Supervision (BFS).

The decisions were taken following a marathon board meeting to discuss the liquidity crisis that triggered a tiff between the government and the central bank.