Key decisions of central bank cannot be left to politicians, says former RBI Governor Subbarao
The HinduFormer Governor of the Reserve Bank of India Duvvuri Subbarao on April 24 said key decisions tasked to the central bank such as reining in inflation änd ensuring price stability cannot be delegated to politicians as the latter have a short cycle. “You can’t leave those decisions to politicans.,” the former IAS officer said, pointing out that decisions on price stability, monetary policy were entrusted to a distinct body called the central bank which operates at an arm’s length from the government. Noting that tensions between the central bank and the government are hardwired into the system, Mr. Subbarao, who was responding to queries on his tenure as RBI governor, said politicians are loathe to giving autonomy to the central bank “because they want their own compulsions to be satisfied. The conversation with the former Union Finance Secretary and Secretary to the Prime Minister’s Economic Advisory Council was moderated by journalist and visiting faculty at the Kautilya School of Public Policy Smita Sharma.
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