Former Reserve Bank of India Governor YV Reddy Saturday said dual control by the Centre and the RBI is a problem in the banking industry.

Reddy, who was speaking at an event at the Indian School of Business (ISB) here, said the RBI says that it does not have enough regulatory powers. The government, however, says that the RBI has enough regulatory powers, he said.

“If the regulator and government could not agree and cannot agree, what is the truth? The truth is that there is a problem of dual control. Narasimhan committee recommended 20 years ago, please end this. Till today, it has not ended,” he said.

Job creation

To a query on job creation, he said, quoting from a recent international conference, the likely scenario from a global situation is that “most probably either 20-30 per cent employed, rest of them cannot be employed because technology will replace“.

There could also be a restriction (in the future) on the number of days one can work in a week.

“Our (in India) strategy should be maintain external sector balance and generate enough domestic demand and domestic supply... I believe that should be one thing which have to be clear. Not that we don’t believe in globalisation, global integration,” he said.

Demographic transition is stretched in India which would be an advantage, he said.

On agriculture

On agriculture, he said the big problem is that agriculture cannot be commercialised unless it is “reasonably” immunised from risks.

The risks lay in “policy-induced risk” (uncertainty originating in policies) and uncertainty about availability of water in irrigation systems, quality of seed, quality of fertilisers, MSP and export policy, he said.

During the event, he also felt that northern states, including UP, Bihar and Rajasthan, may witness major development in the future.

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