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RBI autonomy fundamental, we have to maintain it: Bimal Jalan

On the impact of demonetisation, he said that there would be a decline in the rate of growth

Press Trust of India  |  New Delhi 

Bimal Jalan

A day after former governor flagged 'reputational risk' being faced by the central bank, another former governor on Tuesday said its autonomy is fundamental and needs to be maintained.

"...The autonomy of the — that is a very fundamental fact and we have to maintain it and I hope the government would give attention to that part also," Jalan said in an interview to CNBC TV18.

Reddy regretted on Monday that the institutional identity of Reserve Bank of India has been damaged and stressed that for central bank "reputational risk is worst risk".

Jalan said one would have to wait and see how the relationship between the government and develops which ultimately is a matter of coordination.

"...It is a matter of consultative approach and it is too early to be able to say how it will grow in...Autonomy of the and autonomy is not what you call independence.

"is a part of the economic system and there is always consultative process between the and the government, but it is a process and when you talk about monetary policy — the autonomy of the is that you can take very hard decisions," he said.

Jalan was Governor from 1997 to 2003 and was succeeded by Reddy.

On the impact of on growth, he said, "It is very difficult to go through the percentage points...But everybody agrees that there would be a decline in the rate of growth. How far it is due to and how far it is the trend from 7.6 to 7.1, you have seen last year itself... Let us wait and see that is the best thing rather than forecasting at the moment."

When asked whether he would have advised the government to take such a big step, Jalan said: "It is a decision and whether a decision is right or wrong that can only be proved over a period of time. If the black money reduces, if the corruption reduces, certainly it is a worthwhile step although it has pained the not so well-of classes more."

However, he added that if the decision leads to further administrative reforms, it would be a major gain.

The government had scrapped high value currency notes of Rs 500 and Rs 1000 from midnight of November 8.

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RBI autonomy fundamental, we have to maintain it: Bimal Jalan

On the impact of demonetisation, he said that there would be a decline in the rate of growth

On the impact of demonetisation, he said that there would be a decline in the rate of growth
A day after former governor flagged 'reputational risk' being faced by the central bank, another former governor on Tuesday said its autonomy is fundamental and needs to be maintained.

"...The autonomy of the — that is a very fundamental fact and we have to maintain it and I hope the government would give attention to that part also," Jalan said in an interview to CNBC TV18.

Reddy regretted on Monday that the institutional identity of Reserve Bank of India has been damaged and stressed that for central bank "reputational risk is worst risk".

Jalan said one would have to wait and see how the relationship between the government and develops which ultimately is a matter of coordination.

"...It is a matter of consultative approach and it is too early to be able to say how it will grow in...Autonomy of the and autonomy is not what you call independence.

"is a part of the economic system and there is always consultative process between the and the government, but it is a process and when you talk about monetary policy — the autonomy of the is that you can take very hard decisions," he said.

Jalan was Governor from 1997 to 2003 and was succeeded by Reddy.

On the impact of on growth, he said, "It is very difficult to go through the percentage points...But everybody agrees that there would be a decline in the rate of growth. How far it is due to and how far it is the trend from 7.6 to 7.1, you have seen last year itself... Let us wait and see that is the best thing rather than forecasting at the moment."

When asked whether he would have advised the government to take such a big step, Jalan said: "It is a decision and whether a decision is right or wrong that can only be proved over a period of time. If the black money reduces, if the corruption reduces, certainly it is a worthwhile step although it has pained the not so well-of classes more."

However, he added that if the decision leads to further administrative reforms, it would be a major gain.

The government had scrapped high value currency notes of Rs 500 and Rs 1000 from midnight of November 8.

image
Business Standard
177 22

RBI autonomy fundamental, we have to maintain it: Bimal Jalan

On the impact of demonetisation, he said that there would be a decline in the rate of growth

A day after former governor flagged 'reputational risk' being faced by the central bank, another former governor on Tuesday said its autonomy is fundamental and needs to be maintained.

"...The autonomy of the — that is a very fundamental fact and we have to maintain it and I hope the government would give attention to that part also," Jalan said in an interview to CNBC TV18.

Reddy regretted on Monday that the institutional identity of Reserve Bank of India has been damaged and stressed that for central bank "reputational risk is worst risk".

Jalan said one would have to wait and see how the relationship between the government and develops which ultimately is a matter of coordination.

"...It is a matter of consultative approach and it is too early to be able to say how it will grow in...Autonomy of the and autonomy is not what you call independence.

"is a part of the economic system and there is always consultative process between the and the government, but it is a process and when you talk about monetary policy — the autonomy of the is that you can take very hard decisions," he said.

Jalan was Governor from 1997 to 2003 and was succeeded by Reddy.

On the impact of on growth, he said, "It is very difficult to go through the percentage points...But everybody agrees that there would be a decline in the rate of growth. How far it is due to and how far it is the trend from 7.6 to 7.1, you have seen last year itself... Let us wait and see that is the best thing rather than forecasting at the moment."

When asked whether he would have advised the government to take such a big step, Jalan said: "It is a decision and whether a decision is right or wrong that can only be proved over a period of time. If the black money reduces, if the corruption reduces, certainly it is a worthwhile step although it has pained the not so well-of classes more."

However, he added that if the decision leads to further administrative reforms, it would be a major gain.

The government had scrapped high value currency notes of Rs 500 and Rs 1000 from midnight of November 8.

image
Business Standard
177 22