RBI at the cross-roads?

| Updated on November 12, 2018 Published on November 12, 2018

With reference to ‘RBI must do more, says FinMin’ (November 12), there can’t be two opinions about the fact that the government and the central bank have had disagreements, but the relationship has never looked so irretrievably broken as it does now. What else could explain the govt's reported persistence with invoking the provisions of Section 7 of the RBI Act? While the Centre-RBI spat does not augur well for their respective images, there is growing opposition to the government’s stance concerning the ‘redefining’ the ‘Capital and Reserve’ requirements of the RBI as per its own political suitability. Further, the govt also wants the RBI to dilute its PCA (Prompt Corrective Action) move against weak banks, asking it to suitably ‘relax’ its NBFCs/HBCs finance related policy as they are faced with huge debt repayment problem apart from urging it to have a ‘re-look’ at other key economic issues.

However, the moot question obviously arises: Why mix politics with economics? It may be quite significant to point out that IMF too has recently expressed its dissatisfaction over the government's move to play truant with the RBI’s autonomy. The RBI’s Central Board meeting scheduled to take place on November 19 may not only turn out to be the ‘fait accompli' for the incumbent Governor but also a huge game changer for the troubled Indian economy. Let us keep our fingers crossed.

S Kumar

New Delhi

Climate of business

With reference to the editorial ‘For affordable health’, there is a need for a business ambience that combines bottomline with social welfare objectives. It is evident from the Competition Commission of India’s report that cartelisation and financial obligations have been a bane for poor sections of the society. Health for money cannot be a mantra for any welfare state as its aim is to protect the citizen’s right to live with dignity. The government could have some regulations in place to keep the prices affordable. For instance it could ask companies to reduce prices after it reaches a particular revenue point.

Vikram Sundaramurthy



Ease of living index

There is much jubilation and pride, especially among government circles, over India jumping 23 positions and reaching 77th rank in the global ease of doing business rankings. This, no doubt, is a significant achievement and timely in the context of the ongoing trend of flight of foreign investments. However, going by the low rung we occupy in the human development indices, despite years of decent growth, the surge in ranking is unlikely to have much bearing on the quality of life in the country.

It is time we constructed an index for ‘ease of living’ in our country to answer questions such as: how much time a citizen spends in government offices to get a piece of routine work done? What is the quality of education in government schools? How do primary health centres and public distribution system function?

Manohar Alembath


With reference to ‘Retail investors take a shine to mutual funds’, It is indeed music to the ears of mutual fund houses that retail investors participation in mutual funds have increased significantly. The growth has come from smaller cities where investors are showing signs of maturity and confidence in mutual funds. Given that the interest rate in PPF and NSC are not that attractive, it makes more sense to invest some part of the savings in mutual funds. And though print and electronic media are doing their part by educating retail investors but investors too must be patient to reap the rewards. With more help from regulator, I am sure retail mutual fund investors will opt for direct option and save on expenses.

Bal Govind




In the heading ‘Nysaa Retail in talks to raise ₹100-125 cr from investors’ (Nov 12), 1 in ₹100 was inadvertently missed out. The error is regretted.


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Published on November 12, 2018
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