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RBI’s Autonomy Not an Indian Concept, Was Introduced by Rajan: RSS Economic Wing Head

In Mahajan's opinion a situation rift between government and the RBI should be avoided by the making them work together in their respective streams rather than going public with dissatisfaction or disagreements.

Eram Agha | News18.comEramAgha

Updated:November 1, 2018, 7:52 AM IST
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RBI’s Autonomy Not an Indian Concept, Was Introduced by Rajan: RSS Economic Wing Head
File photo of RBI headquarters in Mumbai. (Reuters)
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New Delhi: Dismissing the debate on “autonomy of RBI” as “old stories”, the national co-convenor of Swadeshi Jagran Manch Ashwani Mahajan said, “Autonomy of RBI is not an Indian concept – Raghuram Rajan started this but it was never practised in India.”

He spoke to News 18.com at the time when there are speculations regarding the resignation of the RBI governor Urijit Patel. He was also critical of the speech of Viral Acahrya, the deputy governor in the central Bank regarding the government's policies and maintaining a regulatory autonomy.

In Mahajan's opinion a situation rift between government and the RBI should be avoided by the making them work together in their respective streams rather than going public with dissatisfaction or disagreements.

He said, “Whenever government tried to suggest something to the RBI – for instance lowering of the rate of interest which has been there since P Chidambaram- then the bank official should not feel offended. It is the job of the government to suggest such measures.”

Similarly, “If in the board meeting proposal was made on the restructuring of the MSME loans, it should not have offended anyone,” he added.

As per media reports, S. Gurumurthy had suggested onetime restructuring of MSMEs loans.

Recently there have been statements made by the RBI officials on the government’s economic policies, which are not acceptable to SJM. “Whatever complain one has, he should talk it out in the Board. Why do you want to go public? Is that going to help you?”

Mahajan said that decisions are taken in the board hence the problems should be taken there instead of public statements against the government. “This kind of attitude spoils the image of the country internationally. The government does not speak in public, then why RBI officials speaking in public?”

He said that this has negative effect on the image of the country. “If public statements are impacting prestige of the country, everybody should be concerned about it. RBI officials should practise restraint, or resign. It cannot work like this,” said Mahajan.

Mahajan said that there should not be “Monetary policy versus fiscal policy.”

Monetary policy and fiscal policy both are important. Both should work in sync, Reserve Bank of India (RBI) needs to work in-sync with the government as the RBI doesn’t have expertise over the fiscal arrangements,” he added.

He further said that problems in India are different from the ones prevalent in Europe and west countries. “For them stability is a major issue, but not for us. In India you have the problem of growth and employment.”​

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