Shift to market economy causing RBI-govt tensions, says Acharya

Mumbai, August 2

A shift to being a market-based economy from a nationalised system has led to tensions between the RBI and government and questions over the Central Bank’s independence, former RBI Deputy Governor Viral Acharya has said.

The economist, who went back to teaching in the US after his resignation from the RBI last year, said the dip in financial savings was another reason which could explain disagreements between Mint Road and North Block. “Over discussions with former Governors and Deputy Governors, I have found one explanation for why these pressures are now simmering more. I think it is because we have moved from a nationalised economy to a market economy,” Acharya said. — PTI