NEW DELHI: Amid the continuing tussle between the federal government and the RBI, former Niti Aayog vice chairman Arvind Panagariya has steered that the 2 aspects will have to sooner or later 'compromise' and 'come together in national interest'.
While the RBI is legally much less unbiased in India than the Federal Reserve within the United States, effectively it has enjoyed the similar independence as the US regulator, the famous economist mentioned in an interview to PTI.
Observing that RBI and the federal government ought to work in close cooperation, he mentioned, "Even when there are differences between the two sides, they must eventually compromise and come together in national interest".
Panagariya, who is recently a professor of Indian Political Economy at Columbia University, identified that even in the US, the federal government and the Federal Reserve now and again work in close cooperation as had took place within the speedy aftermath of the 2008 world monetary crisis.
He, on the other hand, famous that it was a pity that the media steadfastly magnified the variations somewhat than highlighting the typical ground the 2 aspects percentage.
The Finance Ministry and the Reserve Bank on several events previously have witnessed divergence of views on key problems concerning interest rate, liquidity and control of the banking sector, however truce largely prevailed after all.
This time across the warfare seems to have reached a flash level, with studies of government starting up consultations with the RBI beneath Section 7 of the RBI Act, which hasn't ever been invoked previously.
The warfare between the Finance Ministry and RBI headed by way of Urjit Patel is on several problems, including reduction to the ability sector reeling beneath monetary tension, dealing with of weak public sectors banks, addressing liquidity problems faced by way of the NBFC sector, and an offer to set up a cost regulatory authority unbiased of the Reserve Bank.
The government has reportedly sent at least 3 letters on different problems beneath Section 7 of the RBI Act that gives it powers to factor any direction to the central bank governor on matters of public interest.
While the RBI is legally much less unbiased in India than the Federal Reserve within the United States, effectively it has enjoyed the similar independence as the US regulator, the famous economist mentioned in an interview to PTI.
Observing that RBI and the federal government ought to work in close cooperation, he mentioned, "Even when there are differences between the two sides, they must eventually compromise and come together in national interest".
Panagariya, who is recently a professor of Indian Political Economy at Columbia University, identified that even in the US, the federal government and the Federal Reserve now and again work in close cooperation as had took place within the speedy aftermath of the 2008 world monetary crisis.
He, on the other hand, famous that it was a pity that the media steadfastly magnified the variations somewhat than highlighting the typical ground the 2 aspects percentage.
The Finance Ministry and the Reserve Bank on several events previously have witnessed divergence of views on key problems concerning interest rate, liquidity and control of the banking sector, however truce largely prevailed after all.
This time across the warfare seems to have reached a flash level, with studies of government starting up consultations with the RBI beneath Section 7 of the RBI Act, which hasn't ever been invoked previously.
The warfare between the Finance Ministry and RBI headed by way of Urjit Patel is on several problems, including reduction to the ability sector reeling beneath monetary tension, dealing with of weak public sectors banks, addressing liquidity problems faced by way of the NBFC sector, and an offer to set up a cost regulatory authority unbiased of the Reserve Bank.
The government has reportedly sent at least 3 letters on different problems beneath Section 7 of the RBI Act that gives it powers to factor any direction to the central bank governor on matters of public interest.
RBI, govt should resolve differences, come together in national interest: Panagariya
![RBI, govt should resolve differences, come together in national interest: Panagariya]()
Reviewed by Kailash
on
November 08, 2018
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