The decisions taken by the RBI on behalf of the Centre to boost the economy is unlikely to have a long lasting impact. RBI’s decision failed to have any positive impact on the market. On the contrary the Sensex plunged after the announcement was made. In order to revive the economy and boost the depreciating rupee, the RBI hiked the limit of External Commercial Borrowing (ECB) and increased the overseas investment in government bonds. It is highly unlikely that it would yield any positive results. The fact is that these announcements by the RBI cannot be called policy based as it is only a relaxation of sorts. In the present scenario these decisions are not enough to attract foreign investments. Relying completely on the RBI, the Centre has once again disappointed across the world and proved that it is not willing to make decisions on its own. It was expected that before Pranab Mukherjee quit as Finance Minister, the Centre would thwart all allegations of indecisiveness and make some concrete announcements. Unfortunately, nothing like this happened.

When the government was not interested in taking concrete economic decisions why did it give an impression that there would be measures to change the economic outlook? Unfortunately, this atmosphere was created none other than the Finance Minister Pranab Mukherjee and Prime Minister Manmohan Singh themselves. The government is probably in an illusion that it needs to do nothing tangible on its behalf. Possibly, this is the reason why the RBI rather than the government is often being seen taking important decisions. The government has failed to realize that the people are still waiting for those economic announcements that have been hanging in the lurch due to its indecisiveness. Certainly, many decisions require opposition’s support in the Parliament but there are many other decisions that depend solely on the discretion of the Centre. Irrespective of its view point, the government by concluding RBI’s decision as a major step is shielding its failure.