Monday, April 8, 2013
The struggling Indian government wants to take over the the Indian central bank, RBI. Since last year and half or so, the Indian economy is struggling and the phony growth rate numbers have fallen down from over 9% per annum to 5%. The government desperately wants RBI to print more money and reduce the market interest rates to allegedly start the economic recovery, but the RBI governor, Subbarao, is reluctant because he is fearing inflation. This has infuriated the politicians and bureaucrats, and now they are planning a full-fledged takeover of RBI's main function of determining the monetary policy. They have presented a bill in the parliament to put bureaucrats on the panel of monetary policy committee while simultaneously reducing the powers of RBI governor to single-handedly determine the monetary policy. If they are successful in this coup d'état, then, the danger of a massive inflation in the Indian economy increases by manyfold factors. I analyze this vital new development in the Indian economy in my new video blog below.