Subhash Chandra Garg- Economy, Finance and Fiscal Policy Strategist

  ACCUMULATED CAPITAL OF Rs. 15 LAKH CRORES UNDER THE ECONOMIC CAPITAL FRAMEWORK OF RBI “Savings for the Rainy Day” or a National Waste?   #subhashgarg  #economiccapitalframework #RBIcapital #RBIsurplus #bimaljalancommittee SUBHASH CHANDRA GARG Economic, Financial and Fiscal Policy Strategist and Former Finance and Economic Affairs Secretary, Government of India   Reserve Bank of India Liabilities/ Sources of Investible Funds Are Made Up of Essentially Two- Reserve Money and Accumulated Capital Reserve Bank of India, like other currency issuing central banks, is the child and regulator of fiat currency. The main function of the RBI is to issue currency, which constitutes its primary liability. In addition, the RBI keeps bankers’ and some ‘other deposits’ of the monetary nature, which when added to the currency with the public makes the currency base of the country, also called the Reserve Money. The reserve money is the principal and the only real...

  MONETARY STABILITY AND INFLATION MANAGEMENT POLICY FOR INDIA   SUBHASH CHANDRA GARG Economic, Finance and Fiscal Policy Strategist and Former Finance and Economic Affairs Secretary, Government of India   Fiat Currency Incubated Monetary Instability   Every good and service produced and consumed in an economy gets exchanged/traded at a value/price expressed in terms of the money. As long as the gold/silver, valuable goods in itself, doubled up as currency, the role of money in the exchange of other goods and services was quite straight forward. All goods and services were valued relative to the value of the gold/silver and the gold/silver coin acted as a stable medium of exchange. There was no notable instability in the value of money. There was no need for any ‘monetary policy’ to control inflation and maintain value of money. Similar stability of money continued to exist when the paper currency notes were introduced as money but were kept aligned t...