An assault on RBI’s autonomy
An assault on RBI’s autonomy: The Government was out of line ordering the RBI on demonetisation. It has violated institutional propriety...
It was obvious from the body language that the RBI was not involved in the decision to demonetise. This has now been officially confirmed in a statement of the central bank to the Public Accounts Committee of Parliament. For a bureaucracy to send a stern, politically worded request to the RBI regarding a decision of this magnitude which lies squarely within the powers of the central bank by is effrontery of the highest order.
The process had started earlier with the civil service getting involved in the selection of the governor of the RBI. In other democratic countries, the autonomy of the central bank is treated with the highest respect. It is only in the erstwhile Soviet Union block of countries that the governor of the central bank was a low-level official."
Please read the full article. This is what happens when people not familiar with the mandated role of RBI, the evolution of the central bank in India and the present relationship between GOI and RBI are forced to write essays.
M G Warrier