Well said Dr Rajan. RBI should have operational independence.The thinking , actions and biases of the Government depend on the political masters where as RBI is an institution taking care of the economy without any biases and it protects the interests of the Government and the people . A strong and independent Central Bank is the strength of the Government and the EGO of individual politicians in the Government cannot play havoc with the Powers and Functions of RBI. Government is supreme and all Institutions come under the Government is well known to all and particularly to RBI and its top boss. But the politicians in the Government should show some maturity in understanding the important role RBI as a CENTRAL BANK of the Country plays to make the economy strong by ensuring stability of prices, economic growth, monetary stability understanding the dynamics of international economies and their linkages and impacts with the domestic economy. . While vote catching and being cheer leader is one of the objectives of the Government, RBI has only one Objective ie economic growth encompassing all round welfare of all. This is possible only if the Government and RBI work in perfect coordination understanding and total alignment. Matured government is the prerequisite for a strong Central Bank.
Dr T V Gopalakrishnan
(This comment appeared in ET against the Dr Rajan's speech RBI should be able to say no to the Government.)
