Zee Media Bureau
New Delhi: Stating that there is healthy respect between the Government and the Central bank Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday said that there is no difference with govt on Monetary Policy Panel composition.
“RBI and govt have reached consensus on composition of MPC and what the Governor's power would be,” Rajan said during the press conference in RBI headquarters in Mumbai, soon after announcing the third bi-monthly monetary policy.
“If we continue to retain veto, we will be maintaining the status quo, ”Rajan further added.
Rajan said that veto power with RBI governor in proposed monetary policy panel will mean no change from current rate setting practice.
Advice is advice but the ultimate decision is of the RBI governor, Rajan said.
“We have been engaged in dialogue with the governement regarding this,” he further added.
The move to strip RBI Governor of veto power on deciding interest rates has recently faced a lot of backlash. This further led to the government recently saying that no decision on curtailing powers of the central bank has yet been taken.
With the FSLRC disowning a revised draft that sought to remove RBI Governor's veto power and give government the control over a proposed interest-rate setting panel, Finance Secretary Rajiv Mehrishi hurriedly called a press briefing to say that the report was neither of the government nor of FSLRC, but "people of India own this draft report".
