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The Big Picture

The War for India’s Central Bank

Investors have been watching India closely since last month, when a deputy governor at the Reserve Bank of India revealed that Prime Minister Narendra Modi’s government has been pressuring the RBI to pursue greater monetary expansion in the run-up to national elections in May. Beyond vote tallies, India's financial and economic stability could be at stake.

In this Big Picture, Eswar Prasad warns that if the Modi government continues its attacks on the RBI, monetary policymaking could become impossible. Worse, Jayati Ghoshpoints out that the government's demands are not being made in the public interest, but rather on behalf of political cronies and favored companies.

More broadly, Shashi Tharoor highlights a larger pattern of attacks by the Modi government on the independence of India's political and economic institutions. But Arvind Subramanian argues that the government has actually been making difficult but necessary reforms to modernize the economy.

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