Govt shouldn’t dictate delivery of mandate,says Subbarao

On the reported differences of opinion between the finance minister and the RBI,he said,“There doesn’t have to be a clash. A difference of opinion is quite understandable. You see governments traditionally have a bias towards growth and the central bank’s dharma is to manage inflation. If the central banks act independently,hopefully one will strive for growth and the other will strive for stability and we will have an ideal situation.”

Subbarao said,“There are no meeting grounds but received wisdom today is that an independent bank has served all jurisdictions very well. We should improve upon that,not cripple it.” The RBI chief’s views have come at a time when the Financial Sector Legislative Reforms Commission proposed several measures,if implemented,will lead to clipping of RBI’s powers.

On the finance minister’s statement in November 2012 that “we will go on the path of growth alone if others are not willing to support us”,he said,“I wouldn’t call it a conflict,but there are definitely differences of opinion and differences … I also want to say that I have excellent liaisons with our finance minister.”