The controversy over RBI transferring surplus funds to the government is needless. The payment is based on the Jalan panel’s recommendation and not the outcome of a whim of the government. While this doesn’t hurt RBI’s credibility, the Modi government will be better off not expecting such a windfall regularly.
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Dr Bimal Jalan has struck a reasonable balance, aware that nothing stands between a sovereign and its desire, but mercifully not going overboard as Shri Subhash Garg was inclined to. No matter which way it is spun, this move will not be well regarded by the global investor community. They would read in it both inordinate fiscal stress – not a positive for prospective bond sales abroad – and a reflection on central bank autonomy.
Dr Bimal Jalan has struck a reasonable balance, aware that nothing stands between a sovereign and its desire, but mercifully not going overboard as Shri Subhash Garg was inclined to. No matter which way it is spun, this move will not be well regarded by the global investor community. They would read in it both inordinate fiscal stress – not a positive for prospective bond sales abroad – and a reflection on central bank autonomy.
Dr Bimal Jalan has struck a reasonable balance, aware that nothing stands between a sovereign and its desire, but mercifully not going overboard as Shri Subhash Garg was inclined to. No matter which way it is spun, this move will not be well regarded by the global investor community. They would read in it both inordinate fiscal stress – not a positive for prospective bond sales abroad – and a reflection on central bank autonomy.