Finance minister Pranab Mukherjee unequivocally applauded the RBI governor D Subbarao for ?his able stewardship of monetary policy?, while he ?fully endorsed the well-balanced measures? announced by the Reserve Bank on Tuesday.
?Let me add that the overall economic scenario in India now looks extremely robust and better than it has any time in the last two years. I congratulate the Governor of the RBI for his able stewardship of monetary policy,? Mukherjee said in a statement on Tuesday. ?The well-balanced measures reflect a mature and balanced view of the needs of our economy and I fully endorse the measures,? Mukherjee said.
?They complement well the policies of the Ministry of Finance aimed at controlling inflation and promoting sustainable growth. These policies should have a gentle impact in tightening money in the economy and should dampen further inflationary pressures,? he added.
The finance minister statement also silences critics arguing that the high level of cooperation seen between the North Block and the Mint Street during the crisis time could be missing now that the economy is recovering.
Mukherjee?s comments indicate that the finance ministry and the RBI are on the same page even as they implementing a ?synchronized and phased? withdrawal of the fiscal and the monetary measures, and move to a pre-crisis level neutral position on both fronts. ?It has been very well synchronized with fiscal policy and has played a major role in India?s healthy recovery,? the finance minister said. In Mumbai, Subbarao reciprocated by saying the RBI will push through the government?s borrowing programme smoothly, despite a hike in rates. Mukherjee said the RBI measures would dampen further inflationary pressures and aid sustainable growth, while having only ?a gentle impact in tightening money?. He was more optimistic on the inflation front.