In his last office speech before demitting office, Reserve Bank Governor Raghuram Rajan on Saturday pitches for a strong and independent central bank.
Rajan’s idea of independency involves a great step that central bank can say 'no' to highest representatives of government and ensure macroeconomic stability.
Known for his outspoken behavior RBI Governor, who completes his three-year term in RBI will return to academia. Before leaving his seat, he also expressed that the ranking of central bank chief should be elevated.
Rajan said in his last public meeting as RBI governor, “It is dangerous to have a de facto powerful position with low de jure status.”
"The central bank should be independent and should be able to say 'no' to seemingly attractive proposals," he said delivering a lecture on 'Independence of the central bank' at the St Stephens College.
But at the same time he also said that the central bank cannot be free of all constraints as it has to work under a framework set by the government.