A good article by IIM-A Professor T T Ram Mohan on the recent tussle between the Government and RBI (the central bank of India).
Central Bank Independence: Just How Much Power Do We Give Technocrats?
I found this quote to be very thought-provoking:
Without naming any institution, Jaitley asked, “Are we weakening the authority of the elected and creating a power shift in favour of non-accountables? Ultimately at the Centre or state, it’s only the elected who are accountable. The non-accountable are not accountable.”
The article raises several points, including how to hold technocrats accountable? Is facing people’s verdict (electorate) the only way to claim that politicians are accountable and hence better and superior than the technocrats? What about people like Jaitley (who, ironically, raised this question about accountability) who lost his election and entered the Parliament in what many call as a “backdoor entry” – which is the upper House, Rajya Sabha. Now one may argue that Jaitley is accountable to the Parliament. But then technocrats are also accountable to some other organ of the democracy. Even Supreme Court is.
The real issue here is not about the institutions (Govt vs RBI), but about the personalities and their ego/agenda.
Government is trying every measure at their disposal to control the narrative in this most crucial period leading to the General Elections in 2019.
Government wants to send a positive and favorable message and expects all the so-called autonomous institutions to toe their line. It “expects” that Supreme Court not only does “justice” to the Ram Mandir case (i.e. rules in their favor to allow Ram Mandir construction at Ayodhya), but does so “swiftly” (i.e. ahead of the General Elections in 2019). After SC disappointed the Govt by postponing the hearing of the case till Jan 2019, the Govt must be planning some other trick to have its way (i.e. bring ordinance to build Ram Mandir and bypass Court verdict).
The same is happening with every institution. RBI is just another example. Govt wants RBI to take measures related to announcing monetary policy, handing over dividend to the Govt or addressing the NBFC mess, in line with what Govt feels is the right step. When someone attempts to disagree, Government invokes a provision under RBI Act which has never been used so far (in simple term, the provision allows Government to dictate what RBI should do).
And then we see such comments by the Finance Minister raising basic doubts about the accountability of RBI officers, rather technocrats in general…
Really a sad phase in the history of India. As they say: This too shall pass…
Hopefully soon in 2019.
This Government must go!