RBI at the receiving end?
RBI at the receiving end?
This
refers to “Simple. RBI Critics Have an Axe to Grind” (Economic Times, Straight Talk Express,
January 17) by R Sriram. I loved the caption.
Amartya Sen to trade unions in RBI, IMF to most of the financial sector
retirees, TOI to Wire and Sriram to me, all have expressed some view on
demonetization. Many more are waiting for a call to bounce upon RBI, as change
(in lower denominations) was not managed the way they expected by the central
bank. All fine.
But,
frankly, what is the autonomy of RBI, many among these “RBI Critics” are
talking about? Is it the carpet which political leadership since 1990’s tried
to pull away from underneath the feet of the RBI Governor and the RBI Central
Board which climaxed manipulating a monologue
report obtained from the Financial Sector Legislative Reforms Commission? In
that case let us remember the role played by Dr Raghuram Rajan who was at Mint
Road for a short period of 3 years, who, by perseverance, saw to it that RBI
remained in one piece.
There
is no RBI autonomy involved in Prime Minister Modi’s November 8, 2016
announcement of withdrawal of legal tender character of Rs1000 and Rs500 notes
or post-November 8 currency management by RBI. The need for alignment and harmony
between fiscal and monetary policy and for that matter GOI resisting the temptation
to do back-seat driving in statutory bodies including RBI being highlighted in
recent debates cannot be brushed aside. It is in GOI interest to have a central
bank with a strong balance sheet, professional expertise and international
reputation. But, the present grumblings in the media does not help in working
towards that end.
M G WARRIER, Mumbai
Comments
Thanks and regards
S.K.Gupta
Panchkula