If the RBI's mandate is to ensure monetary stability, and Finance Ministry's mandate is to ensure fiscal stability, then can the monetary and fiscal stability co-exist without RBI and the Finance Ministry going hand-in- hand? Typical example, under normal circumstances, high taxes and less government spending should lead to lower interest rates to ensure the overall economic growth does not suffer.
Yes, there may be healthy differences between the two depending upon overall situation prevailing in the financial system as a whole. But at the end of the day, the Hon'ble Finance Minister is an elected representative of the people of India, and is answerable to our Parliament.
Thus, the top leadership of the RBI needs to be sensitive about the concerns expressed by the Hon'ble Finance Minister, and work out amicable solution/s to address the same.
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