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RBI or Government of India: The Owner Of Monetary Policy

RBI or Government of India: The Owner Of Monetary Policy

Ever since the NDA government came to power in June 2014, the finance ministry led by Mr. Arun Jaitley and the Reserve Bank of India led by Mr. Raghuram Rajan has been constantly engaged in a turf war. This can be attributed to the fact that while the major focus of the government lies on attracting foreign investment and raising capital to jumpstart the Indian economy whereas RBI has been making all out efforts to control the wholesale and consumer inflation which acts as a counter balance to the governments aspirations. The government wants to capitalise on the considerable reduction in global crude oil prices and the positive sentiment with respect to it by reducing its fiscal and current account deficits by attracting foreign investment which can be greatly aided by a lower lending rate by the central bank. Contrary to it the Reserve bank has been reluctant regarding lowering the interest rates. As a result there has been a constant battle of wits going on between the two which has led to the discussion on who should control the monetary policy of India.

Munal Saini
"I Maintain A Daily Planner" - Sumeet Bhansali - SJMSOM, IIT Bombay Topper

"I Maintain A Daily Planner" - Sumeet Bhansali - SJMSOM, IIT Bombay Topper

This is a continuation of our series on First Year MBA toppers at elite b-schools. SJMSOM, the b-school at IIT Bombay, has established itself as one of the premier b-schools in the country. With the stellar bunch of candidates it attracts, topping the exceedingly competitive first year of MBA is no mean feat.

Student Team 2015-16