Abheek Barua: Policy on the hop? | Business Standard Column

Abheek Barua: Policy on the hop? | Business Standard Column

My VIEW:

March
17, 2015
This excellent open analysis of
the challenges faced by RBI in the context of a top to bottom revamp of its own
structure and the credibility issues arising from hurried rushing through of
some of the half-baked Financial Sector Legislative Reforms Commission(FSLRC)
recommendations, deserves to be taken seriously by both RBI and Finance
Ministry for a quick “stop, look and proceed” in regard to the speed and
direction of the policy vehicle they are riding. The effort to divide
responsibilities in regard to fiscal and monetary policy responsibilities now
being attempted, while theoretically better, may breed more problems.
One wishes, even at this
stage, wiser counsel prevails with GOI to review the decision to hurry with the
move to transfer the responsibility of managing public debt from RBI to Finance
Ministry. Not in a very distant past, we have seen regulators including RBI
reiterating day-in and day-out that they enjoyed statutory autonomy. The
present government has successfully created an environment of mutual respect
between finance ministry and regulatory and supervisory bodies in the financial
sector. As brought out in the article, time is not yet ripe to make new
experiments in public debt management.
M G Warrier,
Thiruvananthapuram  

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