Category: BookExcerpt

Hat Tip : Anantha Nageswaran

I have a dream. Perhaps it is a nightmare. 

There is a public event and on one side of the stage are lined up Messrs Bimal Jalan, C. Rangarajan, Y.V. Reddy, D. Subbarao, Rakesh Mohan, Raghuram Rajan, Urjit Patel and Viral Acharya.

I am alone on the other side.

I am being lectured on the RBI’s balance sheet by this eminent group of current and former RBI officials, and the hordes—especially the fawning elites in journalism, TV, financial community, etc.—are cheering them on. 

One of the group lectures me that I don’t understand monetary economics because transferring excess capital would increase inflation, forgetting that he too made my case when he was in my job.

Another asks how I dare raise such a proposal to raid the RBI and destroy a great public institution.

Yet another harangues that I am just another Ministry of Finance lackey.

I respond with my arguments.

The eminences are dismissive.

Suddenly Ben Bernanke and Mario Draghi appear.

They had been bold in deploying their balance sheets during their respective financial crises, taking risks that eventually paid off.

I appeal to them.

They examine the case and pronounce their verdict. ‘This is such a no-brainer,’ they say. ‘Obviously, you should do whatever it takes.’

From Arvind Subramanian’s Book ‘Of Counsel : The Challenges of Modi-Jaitley Economy (Chapter 2.2, page 75)