Jaitley has restored the equilibrium between the government and RBI

Success, as the saying goes, has a thousand fathers and failure languishes as an orphan. Finance Minister Arun Jaitley and RBI governor Urjit Patel at 569th central board meeting, New Delhi, February 10 The deft, cool and coordinated manner in which finance minister Arun Jaitley finessed and then defused what could have blown up into the crisis of this winter, with debris flying into the next general election, has thereby received less credit than it merited. When Viral Acharya, deputy governor of the Reserve Bank of India, lit a fuse by describing any potential dilution of RBI’s “independence” as “potentially catastrophic” the stage seemed set for an extended confrontation between RBI and government over enhanced liquidity for the small and medium sector, a key focus point of Prime Minister Narendra Modi’s vision for higher economic growth. Monetary policies must necessarily depend upon the larger policies which a government pursues.” Nehru mentioned that it would be “completely absurd” if RBI opted for a policy different from government as it was only one part of “various activities” in governance. Finance Minister Arun Jaitley has successfully protected Prime Minister Modi’s growth policy, defended the principle of authority, defused a ticking bomb and restored the equilibrium that must rule relations between the Union government and the central bank of the country.