Taking a swipe at
RBI deputy governor
Viral Acharya's warning over 'wrath of financial markets', Subhash Chandra Garg, secretary, department of economic affairs, tweeted that most of the indicators of the economy are well under control.
"Rupee trading at less than 73 to a dollar, Brent crude below $73 a barrel, markets up by over 4% during the week and bond yields below 7.8%. Wrath of the markets?" tweeted Garg, in a veiled attack on Viral Acharya's comments last week saying that government that try to undermine the autonomy of central banks will incur the wrath of financial markets.
Both the RBI and the government have found themselves caught in a public spat on the issue of autonomy of the RBI.
The government wants the RBI to relax its PCA norms in order for banks to increase lending and ease the liquidity conditions in the market. It has also raised the issue of loans to the SME & MSME sector, transfer of RBI reserves, dilution of NPA norms for power sector accounts among others.
According to reports, the government has issued letter of consultation to the RBI governor under section 7 of the RBI Act on issues concerning public interest. Section 7 of the RBI Act allows the government to issue directions to the central bank over issues it deems important in public interest.
The letter of consultation is believed to be the provocation for Viral Acharya's scathing speech last week where he sounded off the government against meddling with the RBI independence.