Developments in Fiscal, Financial and Monetary Institutions

INDIA - Report 13 Mar 2015 by Ajay Shah

Executive Summary There is an important three-pronged move in institution building, which comprises: (a) formal inflation targeting at RBI; (b) unburdening RBI of the conflict of interest of debt management for the government; and (c) giving RBI a bond market through which monetary policy would become effective. These three initiatives are coherent when seen together. However, two out of the three are as yet incomplete even in the statement of their objective. There is strong resistance from RBI on the third, which might result in its being withdrawn.The Problem From 1934 onwards, while Ind...

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