Mumbai: Finance minister Arun Jaitley Thursday admitted there were two-three areas of differences with the RBI, but questioned how a mere discussion on its functioning could be considered “destruction” of an institution.
Under attack politically for creating circumstances that led to the resignation of Urjit Patel as the central bank’s Governor, Jaitley listed out a string of actions initiated by past governments including Congress PMs Jawaharlal Nehru and Indira Gandhi asking RBI Governors to resign. Speaking at the Times Networks India Economic Conclave, Jaitley said the differences with RBI included credit flow in the economy and liquidity support, and added that the government had initiated a “discussion” to convey its concerns.
“A discussion with an important institution, which is independent and autonomous, to tell it that its a part of your (RBIs) functions and therefore this is an important area of an economy which you must look at, how is it destruction of the institution?,” he questioned.
According to reports, the government had initiated discussions under the never-used Section 7 of the RBI Act which provides for the central government forcing down decisions in public interest.
It is this aspect, which led to voicing of concerns across and also a strong speech by RBI Deputy Governor Viral Acharya to warn against compromising RBI autonomy. (PTI)
