Friday, June 5, 2015

The gap between the Government and the RBI

Government has a political cum economic agenda whereas RBI has only the economic agenda. The Government takes half hearted measures to keep a balance between Politics and Economics and the RBI takes measures based on the possible results of the Government action  on the economy. The fact of the matter is that the economy has not picked up strength as the Government believes and talks and this RBI has boldly brought out in its recent credit policy perhaps for the Government to get a clue. Despite this, RBI cut the repo rate by 25 basis points is only to pacify the Government and satisfy the market sentiments. No doubt Government has lot of very good intenstions to take the economy forward and has been taking all possible steps , but it has its own limitations as there is an opposition, there is a bureaucracy and  there are fiancial constraints. RBI maintains its stance and will always be supporting the growth with price stability.The environment should be conducive and for this the Government has to take the initiative.  

Dr.T.V.Gopalakrishnan

(This comment sent to ET dated 5/6/2015)

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