Glenn Stevens has a great speech from 2006 telling the story about how Australia evolved out of the pegged exchange rate. Reading it is useful for thinking about India's policy questions about the monetary policy regime. As is typical with central banks from the first world, the writing quality of the speech is excellent. I was amused to see this story from the pre-1983 period:
The exchange rate management committee also sought to add a random element to the daily movements in the exchange rate, around the general trend appreciation, to reduce the predictability in the movements in the exchange rate and thwart the speculation.
It struck me that the thinking at RBI circa 2007 was not that different from the thinking of RBA pre-1983, i.e. over a quarter century ago.