Jaitley: No disconnect with central bank

Indian Finance Minister Arun Jaitley said the government and central bank are having "free and frank" discussions, dismissing speculation of disputes as the Reserve Bank of India undergoes the biggest overhaul in its history.

"There is no question of any disconnect," Jaitley said after a customary annual appearance before the bank's board to explain steps proposed in last month's budget.

Jaitley and central bank Governor Raghuram Rajan are in talks to finalize a structure for a rate-setting committee similar to the Federal Reserve Board or Bank of England, as well as formalize the government's decision to separate debt and monetary management. They have already agreed on a formal inflation target, a decision announced in the budget.