The public row between the ministry of finance and the Reserve Bank of India has been making news. The media have reported statements, and unearthed similar rows that occurred earlier. They have also pointed out that the Reserve Bank of India Act gives the finance ministry unlimited power to bend the RBI to its will. If that is so, what both sides say does not matter: if push comes to shove, the finance minister can dismiss the dissenting governor and deputy governor and put his own yes-men in their place. In that case, the merits of the contretemps are irrelevant; the finance minister will win -- unless he realizes his error or sees that display of muscle would do his image no good. He is not known for backing down or changing his mind, so the likely outcome seems boringly clear.


Read Ashok V Desai's column here.