RBI is fully autonomous, but govt is sovereign: Shaktikanta Das

Mumbai: The Reserve Bank of India (RBI) governor Shaktikanta Das on Friday stressed that the Indian central bank is more than 100 per cent autonomous and that there is no interference from the government when it comes to taking decisions. He also underscored that the conversation with the government cannot be stopped because the government is the sovereign and the RBI is part of the sovereign.

“Government is the sovereign. RBI is a part of the sovereign. RBI is not a sovereign by itself,” said Das.

“Let me tell you, there is lot of interaction between the RBI and the government. But, so far as decision-making is concerned or taking a final call on any issue is concerned, I can tell you, with all my confidence, that they are taken by the RBI and the RBI is more than 100 per cent autonomous in decision-making. Nobody interferes in my decision-making,” Das said at an event organised by India Today Group.

“The RBI is not a cheerleader for anyone but people who say the central bank should not be a cheerleader for the government, I have one question: ‘Do you expect the RBI to go on lecturing and abusing the government on the economy?’” Das said.

“There will be differences of opinions, there is a difference of opinion between the RBI and the government on several issues but we do talk and these discussions are internal, he added.

“If at the drop of a hat, I rush to the media and make a statement expressing my differences with the government, then what it is going to achieve,” Das asked and said it is desirable that such expression of dissent is done internally.

In the past two governors Raghuram Rajan and Urjit Patel and also deputy governor Viral Acharya have resigned due to their differences with the government.

Das added that the future rate cuts would depend on the incoming data but warned that India cannot have lower interest rates like in advanced economies. Since February, the RBI has reduced repo rate by 110 bps in four successive actions with the last one being an unconventional 35 bps, bringing down the policy rates to a nine-year low of 5.4 per cent.