Editorial : Time to talk: on Centre-RBI differences

The Centre-RBI face-off is not healthy. They must resolve their differences in private

The simmering(उभरते/नरज़ हो जाना) tensions over the last few months between the Reserve Bank of

India and the Centre found spectacular release over the weekend through a public speech by Deputy Governor Viral Acharya. “Governments that do not respect central bank independence,” said Mr. Acharya, “will sooner or later incur(उठाना/झेलना) the wrath of financial markets, ignite(जलाना/सुलगाना) economic fire, and come to rue the day they undermined(कम आंका/दुर्बल करना) an important regulatory institution.” These are very strong words and raise the question: why? This is not the first time that the RBI has had a run-in with the mandarins at North Block, and it will not be the last. India has had Finance Ministers who got frustrated(निराश) enough(काफी ) to say that they would “walk alone” in driving the economy, and RBI Governors responding that the Centre would still(अभी भी/शांत रूप में) be thankful that the central bank exists. Indeed, disagreements(असहमति) between Mint Street and North Block over setting benchmark interest rates have been common over the years. What is different this time, though, is that the disagreements, none of which are insurmountable(दुर्गम/अति कठिन), appear(दिखाई/रूप लेना) to be over regulation per se. There are three issues on which the Centre seems to have irked(खफा/परेशान) the RBI. It has refused(अस्वीकृत) to accept Governor Urjit Patel’s point that the RBI is hobbled(घिरा हुआ/लंगड़ाना) by lack(कमी) of adequate(पर्याप्त ) powers in regulating public sector banks. The second is the tussle(संघर्ष) over the RBI’s burgeoning(तेजी से बढ़ते) reserves, a piece of which the Centre is eyeing to bridge its fiscal(वित्तीय/राजकोषीय) gap. The RBI resents(विरोध किया/क्रोध करना) this. The last is the attempt by the Centre to set up an independent payments regulator, which the RBI sees as encroachment(दख़लंदाज़ी/अतिक्रमण) of its turf(मैदान/घुडदौड की जगह).

For its part, the Centre has several grouses(मैल/बड़बड़ाना), the chief among them being over an RBI circular of February 12 which redefined NPAs and revised(संशोधित/पुनरीक्षित) the framework for resolution(प्रस्ताव)/संकल्प). It is also upset that the central bank is not doing enough to ease the ongoing(चल रही ) liquidity(नकदी/चल निधि) squeeze(दबाव/निचोड़) through extraordinary measures(उपाय). These are issues that could be easily addressed(संबोधित किया/निवेदन कर हुआ) by sitting around a table, but the fact that they haven’t done so points to a complete breakdown(टूटना) of communication between the RBI and the government, something that bankers have been privately acknowledging(मान लेना/स्वीकारना) for some time now. A certain amount of creative tension is systemically in-built given their different perspectives: one is short-term and political; the other is long-term and technical. Such tension is good for the economy. Yet, that is no excuse to spar over turf or make statements aimed at pressuring the other side into acting in a particular manner. The current row is definitely worrying given the backdrop of economic turmoil, globally and domestically(घरेलू स्तर पर). The Centre and the central bank must talk behind closed doors and resolve(समाधान करना) their differences as mature(परिपक्व/तैयार होना) entities(संस्थाएं), as they have done so many times in the past.

Important Vocabulary

1.Ignite(जलाना/सुलगाना)
Synonyms: burn, flare up, inflame, kindle, enkindle
Antonyms: cool, extinguish, put out, quench,dull

2.Frustrated(निराश)
Synonyms: balked, crabbed, cramped, crimped, defeated
Antonyms: encourage, fulfilled, inspirited, stimulated, uplifted

3.Insurmountable(दुर्गम/अति कठिन),
Synonyms: hopeless, impassable, impregnable, invincible, overwhelming
Antonyms: beatable, attainable, defeatable, possible, surmountable

4.Irked(खफा/परेशान)
Synonyms: annoy, bother, disturb, gall, inconvenience
Antonyms: aid, assist, calm, delight, help

5.Hobbled(घिरा हुआ/लंगड़ाना)
Synonyms: falter, halt, shuffle, stagger, stumble
Antonyms: continue, free, go, let go, move

6.Tussle(संघर्ष)
Synonyms: brawl, fray, free-for-all, scuffle, skirmish
Antonyms: agreement, harmony, peace, accord, calm

7.Resents(विरोध किया/क्रोध करना) 
Synonyms: dislike, begrudge, grudge, be in a huff, be insulted
Antonyms: be happy, like, love

8.Encroachment(दख़लंदाज़ी/अतिक्रमण) 
Synonyms: inroad, intrusion, invasion, trespass

9.Refused(अस्वीकृत)
Synonyms: banned, blocked, denied, disavowed, dismissed
Antonyms: allowed, permitted, consented to

10.Simmering(उभरते/नरज़ हो जाना)
Synonyms: boiling, heated, hot

11.Grouses(मैल/बड़बड़ाना), 
Synonyms: bellyache, grievance, gripe, grouch, grumble
Antonyms: compliment, flattery, praise

12.Breakdown(टूटना) 
Synonyms: disintegration, disruption, failure, mishap, neurasthenia
Antonyms: mental health