Archive for January 20th, 2017

How Governments of Andhra and Telangana are fighting over property in Delhi!

January 20, 2017

Leave disputes within the region. The disputes between AP and Telangana are moving beyond borders to fight for assets and liabilities.

The fight is now for AP Bhavan in Delhi:

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UP Elections: It isn’t development versus caste, but development through caste.

January 20, 2017

An interesting story on UP elections via journey of two houses.

Both the mud houses got developed due to Lohia Housing Scheme started by the current SP Government:

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The history and importance of Section 7 (1) of RBI Act..

January 20, 2017

Some commentators have invoked Section 7 (1) of RBI Act to suggest the RBI Board had no choice but to go ahead with the 8 Nov 2016 move.

Section 7 (1) says:

[7. Management.

(1) The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest.

Given one was trying to figure RBI Board History, I came across why this section came into being at the first place.

As argued earlier, RBI started as a shareholder bank with Board nomination coming from both Government and shareholders. However, while working towards RBI’s nationalisation the shareholder angle did not matter anymore. A Bill was prepared to amend RBI Act.

In the  bill, on one of the points RBI Governor suggested that in case of differences between the two, the government should take responsibility for their action. However, Finance Ministry refused this and added what is now seen as Section 7 (1). From RBI’s First History Volume:

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Evolution of RBI’s Board (1935 onwards)

January 20, 2017

Despite one wanting to withdraw from Currency Withdrawal exercise, it continues to ask questions and remains exciting.

The role of RBI Board in the exercise which was a mystery in the early part of the debate (not for the readers of this blog ) has become a major issue now. There are comments on both side of the debate. Some suggest the role of RBI Board shows how RBI has lost its autonomy and others who suggest this is not the case. Then there were concerns raised about FSLRC’s suggestion on reducing the RBI Board strength which has not been commented by anybody.

As there is so much chaos, it is best to get back to genesis. How did RBI Board evolve?

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Legislating Instability: Adam Smith, Free Banking, and the Financial Crisis of 1772

January 20, 2017

This is the title of a book by Prof Tyler Goodspeed. A brief of the book is here.

The failure of Ayr Bank in 1772 was a turning point in financial history. It led to change in thinking of Adma Smith who till then favored banking free of government regulation. Thus, this event continues to inspire financial historians who look for different viewpoints to explain the crisis.

Prof Hugh Rockoff reviews the book and sums up:

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