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"The autonomy of the central bank, under the RBI law, is an essential and accepted requirement of governance. Indian governments have nurtured and respected that, "the government said in a statement.
He stressed, however, that the government and the central bank must, in their operation, be guided by the public interest and the requirements of the Indian economy.
"To this end, the government and the RBI organize from time to time extensive consultations on several issues. This is also true of all other regulators. The Indian government has never made public the subject of these consultations. Only the final decisions taken are communicated. The government, through these consultations, places its assessment on problems and suggests possible solutions. The government will continue to do so, "the statement said.
Economists believe that tensions between the government and the RBI are negatively negative for Indian financial markets as well as for the economy.
Sujan Hazra, chief economist at Anand Rathi, said the differences between RBI and the government were not new. This happens throughout the term of the governors.
"The differences between the government and the RBI are good. But this kind of conflict needs to be resolved through higher level consultations, rather than making it public. Obviously, if it is a public domain, it will not only create confusion in the financial markets, but it will also affect the overall state of the economy. Such things should be avoided, "he said.
He said the central bank worried about inflation and financial stability, while the government favored growth. "Everything that has appeared up to now is not a good thing to do. The news is sentimentally negative, which can also be negative for credit, "said Hazra.
At 1.15, the Sensex BSE was trading at 128 points, or 0.38%, or 3409.22 points higher than the rupee. The national currency traded at 73.91 against the US dollar.
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