Millennium Post

Jaitley dispels talk of rift between govt and RBI

Finance Minister Arun Jaitley has said that there is no disconnect between government and the Reserve Bank of India (RBI). Addressing mediapersons after RBI board members meeting in New Delhi, Jaitley said that there has always been regular interaction between RBI and government and all issues, which concerns both of them, were discussed. On the issue of proposals in Finance Bill, Jaitley said that the bill is before Parliament but the discussions and getting the opinion of RBI always continue.

Commenting on the recent interest rate cuts, RBI governor Raghuram Rajan said that while the external environment is a constraint there is more need to do with the internal environment. On the issue of unseasonal rains, Rajan said there is no direct connect between rain and price rise but there is need to be more careful on food management front.

Emerging from the first post-Budget meeting between the Finance Minister and the RBI board, Rajan said future interest rate cut will depend on the pattern of inflation, which could be impacted by recent unseasonal rains and hailstorms.

“We have complete free and frank discussions and therefore there is no question of any disconnect... between the bank and the government, I have repeatedly clarified that,” Jaitley said after the meeting which among other things discussed macroeconomic developments and operations of RBI.
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