It is easy to say RBI Governor Duvvuri Subbarao (‘A devalued central bank’, November 6) is a puppet in the hands of his former boss, Finance Minister P Chidambaram. The finance minister wanted interest rates cut and he obliged with the desired repo cuts. The finance minister wanted more liquidity and he delivered.
But if you were the RBI Governor what else would you have done? The fact of the matter is that a sharp slowing in growth today appears more of a fear than inflation, and it appears that way in most parts of the world. So, if you agree that the need of the hour is to rescue growth, then the RBI Governor has done the correct thing, even if it was at the prompting of the finance minister and the political class which doesn't want to see any job losses in the period up to the elections.
Criticising the RBI Governor for doing the right thing is akin to criticising Manmohan Singh’s actions when he was the country's finance minister just because the IMF was also of the view that the fiscal deficit needed to be cut.
The other criticism of various committee reports (those advocating only inflation-targeting by the RBI and a free-float of the rupee) are well taken.
Sanjiv Sinha, New Delhi