Letter to BS: RBI should be allowed to function as an autonomous body

Reserve Bank of India | File Photo
On the autonomy of the Reserve Bank of India (RBI), the strong headed former Finance Minister T T Krishnamachari had said, “RBI was no more than a subordinated department of the finance ministry”. Now, when the top brass of the RBI and the government of India are at loggerheads, what the former prime minister Manmohan Singh had said in 2014 has surfaced. Singh had said, “The finance minister is always superior and the RBI governor can’t defy him”. This view of Singh is reflection of his quiet and down-to-earth personality. But, in sum and substance, Singh's submissive view is not different from TTK’s outburst.

A king does no wrong. If the aforesaid views of the two prominent people of reckoning are accepted as gospel truths, they may lead to far reaching and awful, if not catastrophic consequences. We shudder to imagine what would happen to the judiciary, education etc if the view relating to the superiority of the finance minister over the RBI governor get validated and extrapolated to law ministers, education ministers etc. It is worth recalling what vice-chancellors of some universities had to face for over two years under former minister of human resource development, Smriti Irani.

There may be no better person than Singh who had the privilege of discharging the duties of the RBI governor, the finance minister and the prime minister of India to express his personal views on the autonomy of the RBI. But, are Singh’s views virtually the last nail in the coffin over the controversy on the autonomy of the RBI? No; not at all. There is scope to dispel the knee-jerk reactions of a handful. The intellectuals must deliberate the issue objectively and decide.

Institutions like the RBI, Life Insurance Corporation of India, University Grant Commission, Central Bureau of Investigation, Election Commission of India and some others have been established for some solemn and committed purposes by an act of Parliament or a resolution of the government. Hence, these institutions should be allowed to function as autonomous bodies with objective morality and with freedom from external influence or pressure.

S N and D G Kanade
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