It is not legal autonomy, but functional autonomy and common sense that require the government to respect the RBI's stand
The Reserve Bank of India (RBI) and the finance ministry are once again in conflict, this time over the reserves of the central bank. This is not their first confrontation, nor will it be the last. There is little doubt that the RBI is not an independent central bank. Economists and historians have pointed out time and again that the RBI was a creation of the politics of its time, heavily influenced by events in England. So, the question to evaluate today is not really one of complete or partial independence; but that given the RBI is not legally an independent central bank, what are the lines that the ministry of finance, the RBI board, and the RBI leadership should draw, and then never cross?
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