News RBI governor's power might be stripped

[Technoglitch]

The Union government on Thursday proposed to strip the Reserve Bank Governor’s veto vote on India’s monetary policy. The government also proposed to grant itself the power to appoint four of the six members of the Monetary Policy Committee, whose remit will include decisions on setting interest rates to maintain inflation at the targeted level.

The revised draft of the Indian Financial Code, put out by the Union Finance Ministry for comments, proposes that the Reserve Bank “Chairperson” shall head the committee, with no reference to the Governor. It is not clear from the draft if a re-designation is planned.

An earlier draft had proposed to give the Governor the right to overrule the monetary policy committee decision. If the inflation target is not met, then the Reserve Bank will have to explain the reasons and propose remedial actions.

Under the revised draft, the non-government members of the committee are to be drawn from the Reserve Bank.

The Reserve Bank’s Board will nominate one of its executives as the fifth member of the committee. The “Chairperson” will nominate one of its employees as the sixth member
Govt. proposes to strip RBI chief of veto power on monetary policy - The Hindu

 

[IndianMascot]

It seems that govt want to grip RBI and politically influence it

 

[scorpionking76]

This will only make things worse. Government wants to bring repo rates down and RR is no mood to listen.

By doing this they will further damage the economy. These steps will help in short term growth and not in long run.

 

[Sanjeev]

This will only make things worse. Government wants to bring repo rates down and RR is no mood to listen.

By doing this they will further damage the economy. These steps will help in short term growth and not in long run.

Aur bolo achhe din aane wale hai this is all the achhe din which we are seeing

 

[scorpionking76]

Going clueless and directionless

 

[Technoglitch]

So would this bring any negative impact for us?

 

[DashMajor]

Acche Din Chale Gaye for Rajan.

 

[IndianMascot]

So would this bring any negative impact for us?

Yes as stated by scorpionking76 bro, government will play with economy for their political benefit.

 

[NinadG]

I think Veto power on monetary policy is a bad idea......especially if the person who is enjoying veto is Raghuram Rajan....
All over the world sovereign always has upper hand as it has to manage fiscals.....
Good if some responsibility is fixed for RBI.....