In his latest book, “Just A Mercenary? Notes from My Life and Career,” former Reserve Bank of India (RBI) Governor D Subbarao unveils shocking insights into his tenure, shedding light on interactions with the Finance Ministry under Pranab Mukherjee and P Chidambaram. Subbarao recounts instances where the ministry exerted pressure on the RBI to soften interest rates and present a rosier outlook on growth to boost market sentiments.
Describing Chidambaram as a persuasive advocate and Mukherjee as a typical politician, Subbarao underscores the lack of government appreciation for the central bank’s autonomy. He asserts that his experience in both the government and the RBI provides a unique perspective on this issue.
Having served as finance secretary before his appointment as RBI governor, Subbarao offers firsthand accounts of government interference, which extended beyond interest rate decisions to include pushing for optimistic growth and inflation forecasts. He recalls feeling discomfort and frustration at the expectation for the RBI to act as a cheerleader for the government, emphasizing the importance of
