FM rebuts critics on economy | Business Standard

FM rebuts critics on economy | Business Standard

Online comments posted on August 15, 2013

Parliament and the country’s political leadership(irrespective of their party affiliations) should rescue the FM from the relationship problems he is having with RBI before it worsens. His observation in Rajya Sabha  that “Let Parliament take a stand on it (focus on price stability is indeed important, it has to be in the larger context of growth and employment generation), so that the message will go to the central bank” reveals the depth of the strained relationship between FM and RBI which is unlikely to get repaired, just by the ensuing change of guard at Mint Road.
Ironically, the same day FM made these observations, though in a different context, RBI Deputy Governor Anand Sinha asserted that “when financial risks rise, the focus of monetary policy should be to contain them even if that means sacrificing growth in the short term”.
While there is nothing unusual in ministers and executives or economists and technocrats having difference of views on policy issues, the present status of relationship issues between FM and RBI goes much beyond that. Perhaps, PM could help out the Financie Minister in resolving the problems of misunderstanding with RBI’s monetary policy stance, as Dr Manmohan Singh is aware of the constraints within which RBI functions and the political context in which FM is getting frustrated. This is required as statements like the one FM made in Rajya Sabha sends out disturbing signals.

M G Warrier, Mumbai



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