RBI controls monetary policy ie. lending and borrowing rates. It has no control over government's decision to spend it on projects.
Apart from controlling lending and borrowing rates and regulating the banks to an extent, it is entirely up to government to whom they want to lend money, which project they want to spend it on.
RBI just ensures that in its endeavors Government doesn't enter into a transaction which can destabilize the economic environment. For example, RBI has no say in imposing import duty on electronic goods. It is entirely up to the government.
No comments:
Post a Comment