Interest rate tussle good for everybody

.....the RBI has shown that the role of the central bank is not to be a pro-active player in the economy but a more conservative one of calibrating money flow in the economy and protecting it from going into a spiral of inflation. This defines the RBI’s role as that of a benign and independent gatekeeper. There was a time when the RBI was the handmaiden of the finance ministry; it responded to the expenditure of the central and state governments and printed the money the government needed. Of course, that did not solve the government’s problems. When money is printed to suit one’s needs, it loses its value. With the onset of economic reforms, it became necessary that the RBI was not seen as the government’s bank, and that it would ensure a level playing field for all money changers.........

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