In Defence of Urjit Patel: The Hindu

In defence of Urjit Patel on

Online comments posted:
It is comforting to see that keeping its tradition, The Hindu is coming out with detailed analysis of different dimensions of the RBI-GOI controversy, which is in reality a dispute over management of India's monetary resources. It was in this context that Dr Y V Reddy referred to the impact on "National Balance Sheet", if you suck out RBI's reserves dry. Till some experts advise on the adequacy of capital (it remains static at a laughable 5 crores today!) and reserves of RBI, pressurising RBI to fund GOI's deficits will not be in ''Public Interest". Before that, GOI need to learn to live within its means. If GOI has a decent balance sheet, which will allow market borrowing without ''depending” on RBI, the level of reserves needed by RBI can be negotiated. In such a situation, GOI may be able to fund the central bank's losses. It would be very easy to destroy the image of trust and responsibility built by RBI over 80 plus years. Remember SS Tarapore's fear about death of the central bank.
M G Warrier


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