The Reserve Bank is adequately
capitalised, but the money should be used for fixing the financial system, not
for financial deficit or financing government expenditure, Former Chief
Economic Advisor Arvind Subramanian has
said.
The economic principles, moreover, say savings should not be used for current consumption, but for long-term investment, he said Thursday.
"If the reserve is used for deficit financing that would amount to raiding RBI and I would be extremely dissatisfie . and disappointed with it," he said, adding the central bank probably is massively capitalised, but the money should be used for fixing the financial system, not for financial deficit or financing government expenditure.
"Also, it should be done cooperatively, not adversarily," he added.
He further said the government could have found a way to solve its differences by setting up a panel, which hopefully would have shared the belief of not using the RBI reserve for deficit financing.
The economic principles, moreover, say savings should not be used for current consumption, but for long-term investment, he said Thursday.
"If the reserve is used for deficit financing that would amount to raiding RBI and I would be extremely dissatisfie . and disappointed with it," he said, adding the central bank probably is massively capitalised, but the money should be used for fixing the financial system, not for financial deficit or financing government expenditure.
"Also, it should be done cooperatively, not adversarily," he added.
He further said the government could have found a way to solve its differences by setting up a panel, which hopefully would have shared the belief of not using the RBI reserve for deficit financing.
The Reserve Bank of India (RBI) has Rs 9.59 lakh crore
reserves and the government, if reports are to be believed, wants the central bank
to part with a third of that fund -- an issue which along with easing of norms
for weak banks and raising liquidity has brought the two at loggerheads
recently.
Responding to a PTI query on the
comments on RBI Board Member Swaminathan Gurumurthy's induction, he said: "I think, he (Gurumurthy),
amongst others, has articulated new alternative conceptions. I think, we have
to engage with that to run an economy. All of us, me included, would plan to
engage with that vision. I promise I will engage with that".
Gurumurthy should try avoiding being a party to build a perception of politicising RBI board appointments, the former CEA said.
Subramanian was in the city to read some the excerpts from his book - Of Counsel: The Challenges of the Modi-Jaitley Economy.
On the Swadeshi vs Videshi debate, he said both extremes should be avoided because finance theory talks about diversification.
"India needs a portfolio. You get your Swadeshi and Videshi economists, but evaluate them on their merits. Finance theory talks about diversification," the former CEA said.
Gurumurthy should try avoiding being a party to build a perception of politicising RBI board appointments, the former CEA said.
Subramanian was in the city to read some the excerpts from his book - Of Counsel: The Challenges of the Modi-Jaitley Economy.
On the Swadeshi vs Videshi debate, he said both extremes should be avoided because finance theory talks about diversification.
"India needs a portfolio. You get your Swadeshi and Videshi economists, but evaluate them on their merits. Finance theory talks about diversification," the former CEA said.
Hi. I’m Designer of Blog Magic. I’m CEO/Founder of ThemeXpose. I’m Creative Art Director, Web Designer, UI/UX Designer, Interaction Designer, Industrial Designer, Web Developer, Business Enthusiast, StartUp Enthusiast, Speaker, Writer and Photographer. Inspired to make things looks better.
0 comments:
Post a Comment