Measuring central bank independence in India – a legal and behavioural case of Reserve Bank of India

Aijaz Ahmad Bhat, Javaid Iqbal Khan, Javed Ahmad Bhat and Sajad Ahmad Bhat

International Journal of Social Economics, 2024, vol. 52, issue 3, 406-421

Abstract: Purpose - This study attempts to quantify the degree of independence of Central Bank of India from both legal and behavioural contexts over the period 1990–1991 to 2018–2019, a period encompassing major developments in the operation and regulation of Reserve Bank of India (RBI). Design/methodology/approach - We followed Jasmineet al.(2019) to calculate the magnitude of de jure independence of RBI and for de facto independence, “turnover rate (TOR) of CB governor” as proposed by Cukiermanet al.(1992) is applied. Findings - The results report that the legal autonomy of RBI increased specifically after the reforms and post formulation of Monetary Policy Committee (MPC). However, the actual independence of RBI remains more or less in line within the critical threshold limit of 0.2. Practical implications - The study proposes effective implementation of laws and procedures designed to promote the independence of Central Bank of India imperative for an effective monetary operation along with a coordinated fiscal policy. Originality/value - Targeted study of a particular central bank on its “independence” aspect in general and of the Reserve Bank of India in particular has not been attempted as on date. It is to this end that the present study contributes. Peer review - The peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-02-2023-0098.

Keywords: Central bank independence; Turnover rate; Monetary policy; Reserve Bank of India; Fiscal discipline; E42; E43; E58 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:ijse-02-2023-0098

DOI: 10.1108/IJSE-02-2023-0098

Access Statistics for this article

International Journal of Social Economics is currently edited by Professor Terence Garrett

More articles in International Journal of Social Economics from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().