Archive for August 19th, 2013

Why is RBI independence questioned when we have PC as our hon’ble FM?

August 19, 2013

I am not too sure what happened in Mr. P Chidambaram’s (PC from hereon) earlier avatars as FM but have witnessed and analysed his two such avatars. First was in 2004-09 which was full of successes (thanks to global economy and previous govt efforts) and second one (from Aug- 2012 onwards) is full of challenges (thanks mainly to his own govt. efforts and star studded economists team).

In both periods what strikes you is how calm PC is with respect to opposition and nothing really angers/fazes him. Contrast this with earlier FM in UPA-2 who threw anger at smallest of hints.

However, one other thing strikes you is how RBI’s independence comes under a q-mark whenever PC is at helm. Like most finance ministers across the world and over time, PC also dislikes tight interest rates but makes it really obvious. The war with the central bank governor comes out in open and this leaves a bitter mouth in the taste.

(more…)

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