Central Bank Independence: A Pseudo de Facto Case of Reserve Bank of India

Abstract

The trend of studies dealing with the correlation between central bank independence and inflation rose to prominence in the last twentieth century, 1980’s. These phenomena lead to development of certain empirical indices for measuring CBI across the countries. This study tries to evaluate the central bank independence in India using the index modelled on the lines of Jasmine Mona and Talla with minor modification regarding price stability objective. The study covers the time period from 1990–1991 till 2018–2019. The results found were that CBI has in India has more or less increased but improved significantly since the adoption of inflation targeting and formation of monetary policy committee post 2016.