Limits to autonomy: Heavens are not going to fall!

Limits to autonomy: Former Reserve Bank of India Governor D. Subbarao’s recently released — — has stories of the run-ins he had with successive Finance Ministers. The media has been quick to lap up these stories.

Heavens are not going to fall!
By and large, a convincing defence for the GOI’s stance on RBI. This is another view. In the light of the concluding disclaimer (the book is yet to be read by those who are talking about it!), let us wait for the month-end, when the book will be available, hopefully. RBI has been within its mandate to expect some freedom in talking about Monetary Policy. Those having doubt are welcome to read the Preamble of RBI Act, 1934. Of course, nothing prevents the political leadership from amending the Preamble! On inflation, Dr Rajan has already started worrying about that monster bordering the GOI prescription of the upper limit of the band of four plus or minus two! Options are getting limited. Either retain the institution of RBI, or make the central bank another department of GOI. No, heavens are not going to fall, in either case.
M G Warrier


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