RBI vs govt: Central Bank would do well to seek autonomy within a framework

T N NinanThe general drift of published commentary since the spat between the government and the Reserve Bank of India (RBI) became public has been as follows: A showdown should be avoided, and both sides should pull back; the government has a point on the need for more liquidity in the system; drawing on RBI reserves to keep the fiscal situation under control is not a good idea; finally, after having packed the RBI’s central board with political fellow-travellers, to now ask such a board to take decisions so far left to the management is best avoided.The board can provide oversight and …
Source: Business Standard