RBI, Centre must work together: Jalan

Advocating the need for harmony between Reserve Bank of India and the Centre, former RBI Governor Bimal Jalan said on Thursday that he favoured autonomy provided it was set by convention rather than by statute.

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"In some countries, the role of the apex bank and the government are independent. I am for so-called autonomy but also believe that it will work if established by convention rather than statute, especially in emerging countries," Jalan said at a felicitation function organised by the Confederation of Indian Industry in Mumbai.

If harmony is lacking, the ability to face problems would diminish measurably, he said adding, RBI is responsible to the Parliament through the government.

"Both of us had differences but all of these were resolved by consensus because of excellent conditions and harmonisation between the two," the newly nominated Rajya Sabha member said.

The best way to progress is to work together, he said. Earlier felicitating Jalan, Union Finance Minister Jaswant Singh said, "Jalan's counsel was always available during his tenure as RBI Governor and it was reassuring to have his presence to lean upon".

"His was a voice of wisdom and I always received support from Jalan," he said adding, "on most occasions, his counsel was sound and available to keep the economy on an even keel".

"Even when I was the external affairs minister, but for the soundness of the Indian economy, I would have had faced insurmountable difficulties," Singh said.

Jalan suggested the need to develop policies based on the country's own realities rather than follow the industrialised nations.