"Public discourse on the political economy in India is marked by a peculiar trait. The ‘who’ overtakes and overwhelms the need for answers to ‘what’ and ‘why’ as also ‘how’. If ‘who’ is acceptable then ‘what’ is also acceptable and if ‘who’ is not acceptable ‘what’ is rejected regardless of merit.
The face-off between the Government of India and the Reserve Bank of India vividly represents this phenomenon. A difference of opinion between the banking regulator and the government deserves reasoned attention and appreciation. The government and the RBI appear to have adopted the principle of ‘my way or the highway’. The occasion for statesmanship has been reduced to a supercilious squabble of the finger-wagging kind often seen on TRP-chasing soaps.
What are the issues in the arena of ricocheting rhetoric? The Government of India wants the RBI to ease the stringent conditions imposed on banks careening with losses and bad loans. It also wants RBI to consider diluting the norms for capital adequacy. And most contentiously, the government has questioned the need for the RBI to maintain high reserves suggesting that excess reserves could be deposited with the government."
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