RBI's Annual Report 2003-2004: At what price protection from forex reserves?

(From Business Line)

IN MAY 2004, we had the semi-annual monetary and credit policy statement from RBI. In July 2004, we had the Economic Survey by experts of the Government, preceding the Budget. Now, we have the same ground covered exhaustively by experts of the RBI in its annual report for 2003-04.

Soon, we will have the October policy statement of the RBI. A feast of frequent analyses of the same facts may well produce an audience fatigue. There has to be a better way of using our scarce reserves of intellectual excellence in the sphere of economic analysis. We should perhaps go by the US precedent, where the Chairman of Federal Reserve gives an annual, and sometimes semi-annual, report to the Congress on the economic environment.

Familiarity and greater frequency of similar surveys does induce indifference, even to wise counsel, however efficiently rendered. It seems necessary to review the content and frequency of economic surveys by different agencies.

Leaving aside this general caveat, one has to grant that the latest annual report of RBI is an excellent piece of work - as much a tribute to the credible performance of the economy as to the deft management of the same by the central bank and the Ministry of Finance.

The report does a …