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Journalism of Courage
C Rangarajan was Governor of the Reserve Bank of India between 1992 and 1997, arguably one of the most challenging periods in the history of India’s central bank. Rangarajan, a professional economist with a PhD from the University of Pennsylvania, has also served as chairman of the Twelfth Finance Commission, chairman of the Prime Minister’s Economic Advisory Council, member of the erstwhile Planning Commission, Governor of Andhra Pradesh, and member of Rajya Sabha, and headed several influential committees. His entire adult life has been spent contributing to and witnessing independent India’s economic growth at close quarters. This book tells the story of his thoughts and actions on a range of issues between 1982 (when he left academics to join the RBI) and 2014 (when he resigned as chairman of the PMEAC).
The first of the book’s three parts, which covers Rangarajan’s time at the RBI from 1982-91, describes in meticulous detail the origins of the balance of payments crisis. The second part, about his time as RBI Governor, details the ways in which RBI adjusted to the fundamentally altered paradigm of the Indian economy in the wake of the economic reforms of 1991. In part 3, Rangarajan talks about his time in Raj Bhavan and the Finance Commission.
While this is an especially valuable book for students of India’s economic history, common readers are likely to find the last couple of chapters — “Advice to government” (his stint heading Manmohan Singh’s PMEAC) and “Some ruminations” — of great interest. In these chapters, Rangarajan touches upon recent economic developments such as the post-2011 slowdown, and reflects on the important challenges and opportunities before India.
With reference to the economic slowdown since 2016-17, he says: “The shocking management failure with respect to demonetisation…and the continuing teething problems of GST had their adverse impact on the economy. Certainly it appears from the data that the investment deteriorated.”
He underlines that reforms can no longer be pushed “under the shadow of a crisis” (like during 1991), and that “we need more discussion and consensus building” in all sectors. Pointing to the experience of the first decades after Independence, he cautions that “Atmanirbhar should not result in pure import substitution…an open economy with some limitations is still the best route to follow.”
Rangarajan repeatedly makes the point that while India must grow at 9 per cent per annum for at least five years in order to have any chance of becoming a $5 trillion economy, it is equally important that the fruits of fast growth are equitably distributed. “We cannot sequence it, growth first and equity later. They need to go together. Growth and equity…must be woven together to give an acceptable pattern of development… Therein lies economic wisdom and economic statesmanship,” he says.
Title | Forks in the Road: My days at RBI and Beyond
Author: C Rangarajan
Publisher: Penguin
Pages: 304
Price: Rs 699
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