80 years of RBI operations…The boot on the other foot

So there was this lady, who needed to be fitted with new shoes. We’ll be the left, said the newly formed Government in 1947 and we’ll give you the right one (pun intended absolutely, in every which way) in a couple of years time. But the right one exists already. From 1935 itself. Yeah, sure, said the left indignantly, but it needs to belong now to the rightful (I mean…leftful) Government! Let’s nationalize it…hmm..all shares in the capital of the right were transferred to the left and the right was created so that it would walk the same way as the left. The left would reverse its stance; the right was to reserve judgement. The left would sometimes be undependable; the right was bank-able. The left was left, and the right..well, right.

Right, so we go on…

So they walked their lady, her Achilles Heel being the left one. The lefty was the one with lofty ideas. Lets adopt a socialistic pattern of society and create equitable, Russian kinda footprints on the sands of time. So the lady swerved left and for the next 30 years walked into huge capital intensive steel mills and a fiercely protected industrial structure in front of her. She socked trade and tied her laces more securely against those dainty western ideas. The right lagged behind, dragged into the dance of the left. The left wanted to create this grand growth math; the right was just correcting the inflationary aftermath. The left created deficits; on the anvil of the right were the tools of CRR and SLR.

And in 1978….the lady looked a bit north east and saw these HUGE Chinese boots left behind by Mao. Around those shoes were equitable and negligible small footprints belonging to the populace of one of the most populated country in the world. It doesn’t matter that one is hungry; so long as all are hungry. Surely these are not the equitable footprints I wanted, she thought. And then she looked to the South East…and saw those laces were coming undone. The original Russian shoes were in tatters. The left shoe realized that the time has come to change the step. And, in 1991, even as the lady groaned and moaned taking only 3 steps at a time, the left changed sides and became the right. The original right was delighted; now they could walk together! Walking together did change things; they were now averaging 7, sometimes 8 steps at a time…

2008..Only housing rubble as far as the eye goes. Every step the lady took, there was a resounding gravelly liquidity crunch under those shoes. The left turned right Government now wanted to go extreme right. Maintaining 8 steps was crucial, a national priority. True, said the original right; but our steps fall on dry roads. There’s no monsoon, there’s high inflation, let’s slow down a bit. So the left-turned- right danced a hop with 8 steps and the right-always-right tried to slow down the rhythm a bit. The lady didn’t quite know what to do, with both feet marching her away into different paces; a jig, a walk, fast, slow, excited, sedate…7, 6, 5 steps was where she could manage.

Oh, we will walk alone if we have to, said the left-turned-right haughtily and forced the right-always-right to change material. So they got IMF-cut leather for the shoe and it now shined intellectually and calmed down everyone with its inherently good common sense and communication. However, it essentially continued to bring inflation to heel. IMF cut leather with new nails became something of a warrior. Our nails are neither hawkish nor dovish, it said. We have owl-like, see-by-night wisdom nails fitted into our system, it said. In the meanwhile, those left-turned-right silent shoes also changed fabric and donned on modi-fied textures, a tad saffron, but increasingly fashionable and with lot more squeak than before. Oh, the saffron fashionable and IMF shiny will ne’er ne’er get along, seemed the popular refrain. But time and again, they tried to create one common rhythm, one common pace…and steadily, it looked like the lady would get her glint back in the eyes.

The left-turned-right promised that we won’t swerve too much to the right. That particular number is popularly called the FRBM. And asked the right-always-right to also commit to a manageable dance. A targeted dance.

And today, whilst celebrating 80 years of being the always-right-right, the left-turned-right gave impassioned speeches on what is now expected so that the always-right can be always right in the future as well. What’s this? Is the right-always using firang paper in its moneyed lining? That is so unlike what the Mahatma would like. Lets use Make-in-India lining to boot up this system. And, it said, do the increasing number of farmers’ suicides not shake the very soles of the always-right-rights? They ought to. Let the right put its footprints everywhere in the villages so that these suicides can stop immediately.

To blame slow growth on the poor soles of the always-right, I can understand. But to now hold them responsible for farmer suicides as well…sure knocked my socks off, that one.

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6 thoughts on “80 years of RBI operations…The boot on the other foot

  1. That was a thoroughly enjoyable post. Perhaps, enjoyable is not really the right word. It has a covering of humour but humour only sharpens the pain that we feel. While you were talking about shoes, I could feel the pain in my foot and the limping that is its logical corollary. Takes away the pace but more importantly the enthusiasm from the journey and that is what has happened to our country.

    Nehru, with his lofty ideals of socialism did immense harm to India’s economy and polity. The greatest hit was taken by the work culture is what I always feel. Somehow, your writing reiterates what I always vaguely felt.

    Your blog is a shining example of why economists, musicians, scientists, and other professionals must write for common people. I feel that it elevates the general discourse in the country, much needed for modern India to grow. Can I thank you enough for this blog?

    Sahil Atreya

    Liked by 1 person

    • Hi Sahil,
      Thank you for that heartfelt comment. I too have often despaired the oft lost trail. There have been so many changes to our economic polity that one starts wondering where do I start the corrections. And how do I do it..The RBI has always been a damage control agency in the face of fiscal indiscipline. And I have been a silent observer of how the Govt. drags it all over…perhaps the angst of the soul transferred itself to the sole 🙂 Happy to meet you here! Keep writing in!

      Liked by 1 person

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