Experts Should Keep Setting India’s Rates, Not Flunkies
Appointing independent technocrats to the monetary policy committee has been one of the government’s most important reforms. It’s worth defending.
Independence is vital.
Photographer: Dhiraj Singh/Bloomberg
In the very near future, we will learn the identities of three new “external” members of the Reserve Bank of India’s six-person monetary policy committee. The system is relatively new. The government must use this opportunity to strengthen, not weaken it.
The very existence of a monetary policy committee is one of Prime Minister Narendra Modi’s most important achievements. In the decade Modi has held power in New Delhi, he has generally avoided institutional improvements or reform, focusing instead on transitory targets and project management.