A Gentleman Economist’s take
By By Bibek Debroy | Published: 21st October 2017 09:00 PM |
Who is Raghuram Rajan? “I understood what the reporter was asking, but I wanted to push back on the attempt to pigeonhole me into existing stereotypes. Somewhat jokingly, I started in a James Bond-ish vein, ‘My name is Raghuram Rajan…’ To my horror, mid-sentence I realised I did not know how to end in a way that did not reveal more on monetary policy than I intended. So with TV cameras trained on me, I ended lamely ‘…and I do what I do’. For some reason, that sentence became the financial press headline the next day, with the details of our monetary policy relegated to the inside columns.”
That explains the title of this book. Raghuram Rajan was/is several things—Professor of Finance at University of Chicago, Governor of RBI, Chief Economist of IMF and Chief Economic Adviser (CEA). This book is a collection of 38 speeches/articles, divided into three sections—RBI days, the global financial crisis and occasional pieces. The bulk (27) is on RBI days, the others are pre-RBI. In addition, there is an Introduction. In the Introduction, he writes, “The job of Governor is probably the most fulfilling job any Indian economist could aspire for.”
That may, or may not, be true. In the list of RBI Governors since 1935, or 1947, pure economists as RBI Governors are rare, as opposed to bureaucrats who have studied economics at some stage. Nor has every pure economist, even if appointed RBI Governor, necessarily distinguished himself. (As a factoid, no
lady has ever been appointed RBI Governor.) In contrast, there is a long list of distinguished economists who have been CEA-s. It’s just that Raghu wasn’t CEA long enough before he moved to Mumbai. Notwithstanding having been several things, Raghuram Rajan’s DNA is that of a teacher, an academic.
From the Introduction, “I did not want to intrude on my successor’s initial engagement with the public, so I determined to stay silent for a year. This book will be published after that year is over. Also, while I have tried to explain my rationale for various speeches and actions through linking commentary, I have respected the privacy of conversations I had with various public figures.” This book could have remained a collection of dry and boring speeches. That doesn’t happen because of several reasons.
First, that teacher’s DNA, and those linking commentaries, their roles under-played in the Introduction, perform a major explanatory function.Second, Raghuram Rajan wrote his own speeches—probably again an academic’s trait rather than a bureaucrat’s. Therefore, even if the subject was relatively sedate, the speeches were lively. Third, he has a sense of humour, evident not only in the Introduction, but also in the original speeches. I have read tomes by ex-RBI Governors, some of recent vintage. Those put you to sleep, unless you are fishing for controversies and juicy morsels they reveal.
As is evident from the quote I just cited, Raghu also happens to be a gentleman, both in terms of respecting privacy of conversations and intruding on Urijit Patel’s space. Therefore, don’t read this book for the wrong reasons. There are no hidden revelations, not even on the demonetisation decision.
Instead, read this book for a perspective on monetary policy, exchange rate management and banking reforms. In hindsight, one should probably have expected more than one solitary speech, out of 27, on stressed assets and NPAs. That only demonstrates this wasn’t taken to be a serious issue then.
I will be less than fair if I do not quote the following: “Perhaps the article that did the most to ensure I would have a fan following was a send-up of the incoming Governor by the courageous though risqué columnist Shobhaa Dé. Years into my term, I finally met her and her charming daughter at an official party, and I was delighted to find that she was as embarrassed as I was about meeting in person after her piece.”