The decision of the government to decline an extension to Subir Gokarn as Deputy Governor of the Reserve Bank of India (RBI) does not speak well about our politicians’ tolerance of regulatory autonomy. The finance minister has been trying to pressure the RBI into cutting rates, but Governor D Subbarao has resisted these attempts so far. Gokarn, as his deputy in charge of monetary policy, has been a key player in this. That he is not being given an extension – normally, there is no reason to deny anyone a full five-year term, unless the incumbent has done things to deserve a truncation after three years – means that P Chidambaram wants to send a message on who’s boss to the RBI.........
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1 comment:
In the Government, it is not only the FM but also Secretaries in the Finance Ministry who wish to show that they are the Boss.The only answer to this attitude of the Government is that every appointee to the post of Governor, Deputy Governor should decide to remain independent( provided he had secured his position only by virtue of his merit and not due to any extraneous considerations, and the Government then would be able to do nothing.This is dreaming for Utopia!!
A.Chandramouliswaran.
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