Regulatory autonomy: The Hindu Business Line
The Hindu Business Line, January 23, 2019
Letters
Regulatory autonomy
With reference
to “The many nuances of regulatory autonomy”
(January 22), GN Bajpai has thrown light on certain grey areas in the
relationship between the government, statutory bodies and organisations
owned/controlled by government. Media interpretations of the differences in
policy perceptions between the government and the RBI had created an impression
that the three predecessors of the present RBI Governor Shaktikanta Das were fighting
for independence from the government whereas all they talked about was
functional autonomy in policy formulation and implementations within the
contours of statute book.
No RBI
governor had ever threatened the government of operating monetary policy
parallel to the fiscal policy. The definitions of regulatory state and
regulatory craft have corrected the public perceptions on this issue.
The basic issues
behind the RBI-government spar need to be addressed by the political leadership
in public interest as they are cancerous and may affect the functional freedom
of all organizations which handle money. Simply put, they arise from Finance Ministry’s
inept handling of fiscal deficit. To cover up its own imprudent management of
nation’s monetary resources, it has become habitual for the Finance Ministry to
use the government’s ‘ownership rights’ over statutory bodies and PSUs to force
funds diversification to the Consolidated Fund of India.
The solution
lies in mapping nation’s wealth remaining unaccounted and considering a
realistic taxation policy which should cover high income groups and
agricultural income.
M G Warrier, Mumbai
Submitted version:
January 22, 2019
Regulatory autonomy
This refers to
the article “The many nuances of regulatory autonomy” (January 22). Though couched in somewhat
technical language, GN Bajpai has thrown light on certain grey areas in the
relationship between GOI, statutory
bodies and organisations owned/controlled by government. Media interpretations
of the differences in policy perceptions between GOI and RBI had created an
impression that the three predecessors of the present RBI Governor Shaktikanta
Das were fighting for independence from GOI whereas all they talked about was
functional autonomy in policy formulation and implementations within the
contours of statute book. No governor in the history of RBI had ever threatened
the GOI that he would operate monetary policy parallel to fiscal policy. The
definitions of regulatory state and regulatory craft have corrected the public
perceptions on this issue.
The basic
issues responsible for the recent GOI-RBI spar need to be addressed by the
political leadership in public interest as they are cancerous and have spread
to the functional freedom of all organizations which handle money in India.
Simply put, they arise from finance ministry’s inept handling of fiscal
deficit. To cover up its own imprudent management of nation’s monetary
resources, it has become habitual for finance ministry to use the GOI’s
‘ownership rights’ over statutory bodies and PSUs to force funds
diversification to Consolidated Fund of India. The methods include (a) asking
institutions like LIC to retain liquid funds to be available at call for
diversion, (b) forcing PSUs and statutory bodies to inflate surplus income and
declare dividends 9a stage has come when ‘advance against future dividends’ is
demanded from organizations like RBI).
Solution lies
in mapping nation’s wealth remaining unaccounted and considering a realistic
taxation policy which should cover high income groups and agricultural income.
M G Warrier, Mumbai
Comments