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| These were interest rate policy, deficit financing, cooperative credit policies and management of sub-standard banks. It may be of interest to note that these four areas are still some of RBI's concerns. |
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| The emerging issues relating to autonomy of RBI can be addressed at different levels. First, at the level of legislative framework, several suggestions have been made to ensure appropriate autonomy and many of them are under consideration. |
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| In particular, proposed Fiscal Responsibility and Budget Management Bill and other amendments to Reserve Bank of India Act would cover significant ground. |
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| Several other suggestions relating to legal framework, as recommended by the Advisory Groups are yet to be taken up. |
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| Second, at the policy level, there are three important constraints on the operational autonomy even within the existing legal framework. |
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| One, the continued fiscal dominance, including large temporary mismatches between receipts and expenditures of Government warranting large involuntary financing of credit needs of Government by the RBI. |
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Two, the predominance of publicly owned financial intermediaries and non-financial public enterprises, which has created a blurring of the demarcation between funding of and by Government vis-
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