ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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On Central Banking

One is inclined to endorse the views of Mary George on the state of the Reserve Bank of India (“RBI: Old and New”, EPW, 12 October 2013).

There was a belief or an unwritten law in the past that the central bankers should neither be seen nor heard in the public. It was the late H V R Iyengar, an exceptionally brilliant civil officer and the sixth governor of the RBI (4th Indian governor, 1957-62), who broke this convention and started periodically making public speeches expounding on central banking practices and policies to the benefit of laypersons. From then on it was a quantum jump to the days of Duvvuri Subbarao who effectively brought the concept of central banking to the doorsteps of even the villagers in India, apart from carrying academicians, the media and all who were interested in the state of the economy, along with him. In retrospect, though he had to face many imponderables in the last two years of his tenure Subbarao fought valiantly to assert the independence of the central bank (not from government but of government) while working towards the objective of distributive growth with stability even though the support from the fiscal authorities was not apparently forthcoming in the desired measure.

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