The Reserve Bank of India’s Governor has a responsibility to speak up. As a public servant, he owes his loyalty to the country and the Constitution — and not just to a government in transit, the Governor, Dr D. Subbarao, said. He was quoting the late I.G. Patel, a former RBI governor, while speaking at the launch of a collection of the latter’s essays — Of Economics, Politics and Development .
At the same time, central bankers have to be sensitive to the democratic milieu in which they function. Governors must choose their issues carefully and help steer debate in the right direction without annoying the government, Dr Subbarao said.
He said that at the start of his career he was advised that as a civil servant his responsibility was to give unbiased advice and leave the rest to the executive. After so many decades, Dr Subbarao wondered whether it was enough to just give impartial advice and not worry about feasibility. On the division between the Government and the RBI, Dr Subbarao said, “We share a common goal and some disagreement is natural between the Reserve Bank and the Government.”