....when it comes to asserting the independence of the Mumbai-based Reserve Bank of India from political masters in New Delhi, D. Subbarao, governor of the central bank, has large shoes to fill. His predecessor Y.V. Reddy had been an RBI Deputy Governor for six years and was at the International Monetary Fund in Washington before he returned to run the central bank. Distance from New Delhi allowed Reddy to chalk out a course that was often seen as adversarial by the finance ministry. The relationship between Reddy and Chidambaram, who was also the finance minister between 2004 and 2008, was sometimes stormy. By contrast, the current governor was the top finance ministry bureaucrat when Chidambaram picked him to run the central bank. Saying no to a benefactor is hard. But Subbarao would do well to convince Chidambaram that untimely monetary easing could threaten stability. His case is strong......
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