August 03, 2015

Individuals vs institutions

Courtesy: Bloomberg



"I will point to the fact that what ought to have been a nuanced and technical debate on the fine-grained details of the IFC, including the MPC, has been widely portrayed as an attack on the autonomy of the RBI—this is a canard, but a useful debating point for some—if not an outright assault on the bona fides of the RBI governor himself" writes Vivek Dehejia in this fortnightly Mint column.


"What has been most bizarre in the current spectacle, at least for this observer, is to be struck that individuals whom one presumes to know better argue vociferously in favour a non-system which privileges the incumbent who happens to sit in the big chair, and, by extension, oppose reforms which would move toward institutionalizing best practice. In other words, while one may legitimately debate whether the MPC should have five or seven members, or whether a majority should rest with those appointed by the RBI or not, it should be incontrovertible that a system which forces transparency and accountability on decision makers is, ipso facto, preferable to one which rests upon individual discretion, opacity, arbitrariness, and lack of accountability.....

What is sorely needed in India—and what has not been on the agenda of any political dispensation, of any particular ideology—is an overall, architectural process of regulatory reform, which distils global best practice through ex ante design and which is instantiated in ex post facto procedure...".

Topic : Transitions / In : OP-EDS
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