Q: Everything you have suggested is so much hard work. It is so much easier to impose the capital control. Who is going to do it in the system?
A: You have said it. Whenever we have the choice between doing that hard work and doing the attractive thing, which often is anti-market, we look for that thing because it is convenient, it is easy and it reinforces our age-old view that market is terrible - we need to constrain it.
Q: You are pretty clear that India should not impose any kind of capital control?
A: I would never say never.
Q: Atleast till this situation is on the rupee front doesn't become very dire or something like that and right now it is not dire according to you it is just a rebalancing of the rupee - is that fair, is that fair assessment?
A: I think that is a fair assessment. I think no central bank; no country ever wants to rule out all options. That always creates one way bets that you never want to say never. But let us not jump to this as the first option and unfortunately whenever anybody does something like this elsewhere in the world we say, some body has done it and so we should think about it.
Q: It legitimizes the entire situation?
A: Yes it legitimizes it. And then at the same time we keep saying India is unique. So we shouldn't follow other people. We follow all the bad things, why.
