With reference to "A reset in policy" by A K Bhattacharya (June 13), the concern aired in the conclusion, "But a reset in equations gives rise to many difficult situations and spawns controversies", can become real only if the central government confronts the Reserve Bank of India (RBI) within the latter's mandated territory of administering monetary policy. It has to be said to the credit of government of India (the period from 1935 to Independence included) that the RBI has been all through manned by competent top management and its views were respected by successive governments in New Delhi.
In all these years, the politics of ruling parties or the personal biases of the RBI governor and his deputies did not, by and large, affect the smooth functioning of the central bank. The game of numbers on the representation on the Monetary Policy Committee (MPC) was an aberration that can be traced back to the partisan Financial Sector Legislative Reforms Commission report, which was a product of circumstances with a built-in effort to "cage" the RBI. That report will remain a reference document and as has happened in the case of inflation targeting and constitution of MPC, in future too, decisions on recommendations will be, hopefully, issue-based and taken only after due deliberations and consultations. In a larger sense, all members of the MPC will be expert professionals in their own fields and will be pursuing national interest rather than breaking into sub-groups within the committee and fighting for the Centre or the RBI.
M G Warrier Mumbai
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