The BJP on Thursday stepped into the brewing row between the Reserve Bank of India (RBI) and the Union government, with the party’s economic cell chief, Gopal Krishna Agarwal, stating that “discussions on independence and autonomy cannot be grounds for supremacy.”
Speaking to The Hindu , Mr. Agarwal said, “The discussion on independence and autonomy of institutions (like RBI) cannot be grounds for supremacy. Institutions here seem to want supremacy rather than autonomy.”
“Government respects autonomy but ultimately the mandate of the two (government and RBI) is different. The RBI looks at monetary policy, while the government has to give direction to the economy at large including infrastructure, social sector, and larger economic policy. The RBI has to integrate monetary policy with the larger aims for the economy,” he said.
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Mr. Agarwal’s comments came after reports of differences between the RBI and the Union government on giving access to the government to the central bank’s surplus, and reported invocation of a never before used section 7 of the RBI Act that allows the government to issue instructions to the regulator.
RBI deputy governor Viral V. Acharya had delivered a fiery speech recently on the autonomy of institutions and the RBI’s larger time frame in laying down policy as against the government’s “T-20” time framework embedded with political compulsions.
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Ease of business
Mr. Agarwal also said the Modi government’s success in economic governance was reflected in the massive 23 places jump that the World Bank gave India in the recently declared list of Ease of Doing Business (EDB).
Addressing a presser on the issue earlier, BJP spokesperson Sambit Patra termed India’s jump on the EDB list as the Indian economy going from “fragile five to the fabulous few” of fast-growing big economies.
“The ease of doing business is based on 10 parameters, and shows that policy decisions taken by the government are in a positive direction. It is historic because among BRICS nations this is the first time that any country has seen a consequent improvement over two years,” he said.