By Nikunj Ohri
The relationship between the Reserve Bank of India and the government is akin to the ties between husband and wife, said former Prime Minister Manmohan Singh.
“One has to respect the autonomy and independence of the Reserve Bank of India,” Singh said at the launch of his book, Changing India, in Delhi today. He said there will be hiccups and differences of opinion between the two great institutions, but they must be harmonised such that the organisations work cohesively.
“We need a strong independent RBI which has to work in close cooperation with the central government…” said Singh. “I do hope and pray that government and the RBI find ways to work together.”
The comments come as ties between the central bank and the government recently soured over differences of opinion on the RBI’s autonomy and its reserves, leading to the resignationof Urjit Patel, its 24th governor, ten months before the end of his term. Patel was succeeded by the veteran bureaucrat Shaktikanta Das.
‘Not Just Accidental PM, But Also An Accidental FM’
Singh said that while he was known as the “accidental Prime Minister”—when he led the United Progressive Alliance governments for two terms during 2004-14—his stint as finance minister in the PV Narasimha Rao cabinet was also by accident.
Rao and Singh’s tenure is best remembered for initiating sweeping economic reforms that pulled India from the brink after it nearly ran out of foreign exchange to conduct trade.
He recounted that when the bureaucrat PC Alexander offered him the post of finance minister, he didn’t believe it. The next day, Singh said, he visited the University Grants Commission office, of which he was the chairman.
When Rao called him to ask whether Alexander—who was principal secretary to former Prime Ministers Indira Gandhi and Rajiv Gandhi—had communicated the move, Singh replied that he was apprised of it, but didn’t take his word seriously.
The original article can be found on Bloomberg Quint.
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