RBI is non-transparent about its actions and about the rationale behind these actions. When MSS issuance was stopped, no announcement was made, nor was a rationale offered. With a lag of months, external observers are left trying to piece together the events from incomplete data. Today, there is no institutional framework in India that enables Parliament to question RBI and its policies. No one is going to answer the question as to who is responsible for the macroeconomic mismanagement that has led to slower growth and higher inflation.

Two prominent expert committees have advocated monetary policy reform, where RBI should shift to a world of transparency, with a focus on inflation. An effort in monetary policy reform today would come too late to save the UPA, but it would help protect future governments from a non-transparent central bank.

The writer is senior fellow, National Institute of Public Finance and Policy

ilapatnaik@gmail.com