- RBI Governor:
- Draws powers from the RBI Act, not the Central Board.
- Appointed by the Prime Minister in consultation with the Finance Minister.
- Takes policy decisions with Deputy Governors.
- Focuses on monetary policy, price stability, and financial stability.
- Finance Minister:
- Represents the elected government.
- Ultimately answerable to the citizens for economic performance.
- Can use Section 7 of the RBI Act to direct RBI in public interest.
- Responsible for fiscal policy (government spending and taxation).
- The RBI is kept at arm’s length from the Centre due to its role as money creator.
- The Finance Minister’s view may prevail in fundamental disagreements.