New Delhi, April 22 -- A speech by Reserve Bank of India (RBI) Governor Sanjay Malhotra at Princeton University on 18 April is noteworthy for setting down in black-and-white some of the basic principles that have guided the central bank over the past many years. Having stood the test of time, they continue to serve their purpose.

The first principle, in the governor's words, is to "prioritize robustness over optimality." In public policy, the best should never become the enemy of the good. Such decisions are about making choices, often between objectives in conflict, for the best outcomes overall.

In the context of RBI, for instance, it could be a trade-off between price stability and economic growth.

Malhotra listed many other princip...