 "RBI")
The current tussle between the RBI and the government over the former’s reserves is not the first one. There was a similar tussle 32 years ago in 1986.
The newly appointed finance secretary, S Venkitaramanan, looked around and found that the government was desperately short of money. He then identified two possible sources for augmenting government revenue.
One was the traditional one of imposing a higher statutory liquidity ratio (SLR), which would make the RBI give the government cheap loans. The other was the RBI’s profits, called surplus.
R N Malhotra was governor of the RBI then. He had been finance secretary from
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