Shot in the arm
Reserve Bank of India the prime
regulatory authority in India and the controlling institution for all banks in
the country has so far conducted itself in an impeachable manner. The
institution is a pillar of hope to the people and industry as has been all
serving and past members on the board.
Right from the time of
Nationalization of Banks in the early 70’s, going through the rough patch of
regulatory confluences during the early liberalization era of the 1990’s till
its modern day influences; the Reserve Bank of India has covered itself in
glory and stood as a beacon of hope during troubled and testing times. Its
credit and monetary initiatives have been taken keeping in mind the interest of
the country at large as well as to strengthen the economy, yet today one is a
little worried, trying to pin point the exact problem that ails the Indian economy.
The Governor of the Reserve Bank
of India also leads the fire fighting exercise to control inflation and
accelerate growth in the economy along with the Government that administers
fiscal policy. In fact lowering of bank rates is an issue that has been
vigorously debated in recent times and the Reserve Bank has been seen hesitant
in taking steps to tinker with the bank rates. The Governor has been of the
opinion that inflation is not within desirable levels and any tinkering will
add to the woes of the common man a view not necessarily shared by the Finance
Ministry. Inflation refuses to be tamed due to increase in rural wages, rise in
oil and commodity prices and increased procurement price for the farmers.
High interest rates act as a
deterrent to production, the overall result being that the economy is caught in
a vicious circle. On the other side the rupee has threatened to run away and is
traded at somewhere around the 61 mark. The current account deficit is
threatening to add to the country’s woes. The dilemma one finds hard to decode
is whether to pursue growth or stabilise prices.
It is in this context that the appointments
of Mr Raghuram Rajan as the 23rd Governor of the Reserve Bank of
India gains importance. A known economist and a young researcher on the trends
in modern economies, he is well equipped to carve out a path through the maze
of problems that the economy is going through at this stage, having had the
foresight to predict the woes of the world in 2008.
The designate governor has his
hands full. But his broad experience of having seen economies through the lens
of the International Monetary Fund and as a professor of the subject, one can
expect him to wage a war to keep things under control and give the much needed
thrust to a fledging economy.
The outgoing Governor Mr D
Subbarao has done his best and the new governor cannot be expected to do much
different Vis a Vis policy direction, but what can change are a fresh thrust of
risk taking and a much needed infusion of ideas and thoughts apart from the
mundane everyday choices. Healing the economy is like a doctor diagnosing a
disease through the elimination method. But a proficient doctor will attempt a
diagnostic solution through his experience, knowledge and foresight.
As he himself has admitted that
there is no magic wand to dismiss all woes that trouble the economy, but a
fresh initiative and thinking can do wonders even when options are minimal.
What will matter more is the will and enthusiasm of the Governor to read the script
perfectly, predict and mould the economy in a manner that can withstand the
present turmoil and help it gallop into the future.
For these reasons a younger
incumbent spells hope when coupled with the academic brilliance and exposure of
the man, further instilling hope for the future. Since the intent looks perfect
and the will seems to be apparent one should wait with baited breath for
sorrows to be transformed to tears of joy and wellbeing.
Robin Varghese
Mail to: robin_vargh@yahoo.comAugust 9, 2013
No comments:
Post a Comment