In a deregulated environment, there is considerable scope to reduce micro-management issues in the relations between the Government and the RBI. At the level of degree of transparency, there is a temptation to continue, what has been termed as the “joint-family approach”; which ignores basic tenets of accounting principles in regard to transactions between RBI and Government.
Some critical elements for progress in reform In spite of difficulties in prioritizing the elements relevant for reform, an attempt is made to mention some elements which present themselves as critical in the light of experience gained so far. First, as elaborated in Governor Jalan’s recent statements on Monetary and Credit Policy, several legislative measures are needed to enable further progress.