Yours truly…When Raghu wrote a letter!

Dear Reader,

Hi! Now that Urjit Patel takes over as the Governor, Raghuram Rajan wanted to share those wicked tips on handling the high profile job properly! Read the heart-to-heart, Governor-to-Governor letter in my humor column “Tweakonomics” in the Hindu Business Line at http://www.thehindubusinessline.com/opinion/columns/yours-truly/article9022386.ece#comments. Else, read it here directly. Enjoy!

—————————————————–

Dear Bro,

Hi… ummm, let me firstly do the right stuff and welcome you to this super-high profile job. It’s obviously every economist’s dream job, and yes, highly gratifying, intellectually satisfying, policy-oriented and autonomous as well (err, at least on paper)!

Okay, formalities over, let me now talk plain truth. This job is the most thankless, frustrating, annoying and the most unenviable post an economist can ever hope to man. And while I’m extremely proud of you, I must convey that what I feel for you right now borders between high anxiety to plain paranoia. Friedman help us all! Why did you accept this, man?

Well, so I thought that I’ll be a good friend and share some of those few experiences that you may benefit from, as you step into the ring to try and control inflation, growth, employment, currency, exchange rates, FOREX reserves, bond yields, bank assets, RBI pay-scales, central banking autonomy as well as the Government’s ego, all at the same time, while still managing to look completely unruffled and fit from your squash game last evening.

The media is the undoubtedly most exasperating part of the job and will insist on calling you Santa Claus (post rate-cut), inflation warrior (post rate hike) and rockstar (when you maintain status-quo). Hehehe, I may be the rockstar, but you are the quintessential rapper, eh?

There’s news from the RBI, Yo! It’s sure lookin good/

Sentiment is up, so is the market mood!

China is down, but the US looks bright/

 

We’ve got a new warrior, Yo! A corporate-wala knight!

Rap…….Patel Rap!

All the best, Bro. I never quite knew how to react to these crazy things they wrote about me. So here is my first advice. It is alright even if you do not plan your post-policy review speech, but you MUST plan how you’ll react to the rapper analogy. Will you be white-lipped and disapproving, or give just a plain bored look, or will you laugh outright? My personal strategy was always “review with a smile”. That humour quotient always works. And oh boy, are you going to need that humour!

A word of caution. Avoid idioms and phrases and just talk plain ole repo. You’ll do well to steer clear of the land of the blind, one-eyed, two-eyed or any kind of king completely. Also stay away from regular birds like hawks, doves, owls; run in the opposite direction on spotting the black swan.

What can I advice you about inflation targeting? It was you who spearheaded the entire process and helped set the bandwidths around the 4 per cent inflation mark. But Bro, there is this other targeting I have to caution you about. Tch, tch, tch, you are too international for this profile. Born in Kenya, graduated from LSE, an MPhil from Oxford, and a PhD from Yale? A stint with IMF and BCG? Are we in trouble! Earlier it was only me who was “unIndian”, but now there’s also Brett Lee and you. Wonder if they’ll invite Brett next. Anyway, welcome to the madness. I am sure you will deal with it with your usual good sense, and set those bandwidths of tolerance around your profile.

Don’t let the volatility in markets lead to volatility in your mind. Let statisticians worry about the ARIMA models. Remember, GARIMA is more important that ARIMA. A final word: When you are having a hard time, read ‘Tweakonomics’ in Business Line.

Sincerely,

Banker on the move.

Advertisements

Econ Mom as the confused driver!

Aaaaaaaaaaaaaarghhh! It’s been such a nutty week and poor Econ Mom is a complete, total, confused mess.

It all started a couple of weeks ago, when my car started making strange noises on applying the brakes. Now, a good ole Honda doesn’t ever create any which noise, forget strange noises, and I was spooked. I tried applying the brakes fiercely, gently, with a smile and with a professional pan-face. Nope.

The car wouldn’t be persuaded and was taken off for an overhaul. In the meanwhile, the Hubs sweetly offered me his car. I’d have liked it with the Hub-chauffeur, but no such luck. I got only the machine minus the man. And the main problem is that it is German.

We, of the Honda tribe, detest German engineering. Gott im Himmel! Hubby’s Polo doesn’t start till you apply some serious muscle tension to the key; and the reverse gear is the first gear plus tension. I tell you, I was unused to such tension in my regular driving life and it was freaking me out.

But, you don’t know the worst yet. The Polo indicator controls and the wiper controls are on the wrong side. The Germans may be marvellous at engineering, but the idiots don’t know their left from the right. OMG. This is magnificiently spooky. I was feeling like a right wing economist being forced into writing a poem “In Praise of Marx and Controls.”

The first day on the Polo and some weirdo who came from the opposite side of our super narrow street flashed his headlights at me. Now this, is a pure-ghee Indian driving phenomenon. The person flashing lights first apparently has the moral right of way, other things be damned. “Oh yeah, I’ll show you who goes first,” I thought viciously and flashed the light indicator viciously to be met by a most efficient German water jet on my windscreen, causing me to jump madly in my seat. “Hell,” I thought, automatically moving my left hand towards the wipers, in the process switching on some indicator lights. “Oh, this is really quite merry”, I thought with gritted teeth as cyclists and bikers behind me started to swear, not quite sure where I might eventually turn. By now, in addition to switching on all possible headlights and indicators, I had also started the wiper on the backscreen. My car does not have the feature and I was terrified. Germans, you back stabbers!

I had a real bad first week with the Polo. Even the radio wouldn’t play soothing songs and after listening to that idiotic woman pleading “DJ waale babu mera gaana bajaa do”, followed by Yo-Yo Honey Singh informing me conversationally in the middle of the downpour that “Din Hain apparently Sunny Sunny Sunny Sunny Sunny Sunny”, I was completely disheartened. I had had it.

Hubby was absolutely enjoying the whole process and had started taking unusual amount of interest in my daily “Aaj ki Polo khabar” ravings and rantings. After listening to my conspiracy theory on how the same radio stations were playing different songs for the Polo drivers, he couldn’t control his glee at all. “You could try writing “Who moved my indicator controls? We’ll get Subbarao to write the foreword for your book,” he suggested wickedly. “Oh, shut up. I’ll write Econ Mom and the Cursed Car instead,” I muttered darkly.

Sigh! As if I did not have enough on my plate, J K Rowling, of all the people, had decided to come out with a badly written book.  Lil One and I had quite a merry little boxing bout the day it arrived home, which I won mostly by virtue of tickling him (“That’s cheating, Mom!”) and then packing him ceremoniously off to school. But I was so badly, badly disappointed. The max humor content the book has to offer is when Albus Potter tells Scorpio, “Yeah, you can’t be Voldemort’s son. You’ve got a nose!”

Oh, really. C’mon, is this Rowling? To read a Potter without the witticism and the detailed plots and well-developed character nuances was such a culture shock. It was exactly like putting a Honda driver into a German car.

And then, the GST Constitutional Amendment Bill was passed. Such a rude shock for us economists! I mean, how could they? The monsoon session had started properly enough, with Rahul Baba dozing off and the rest shouting madly. Now, technically, this fervour had to be followed up with paper balls, flinging of chairs, and well, maybe pepper spray for high drama. Chidambaram had to shout that the NDA does not know its economics, and Subramaniam Swamy had to follow it up by saying that nobody in the world knows economics. An apoplectic-with-moral-rage Arnab, falling markets and a witty Tweakonomics piece by Yours Sincerely would wrap it up nicely.

So there I was, waiting for the Amendment not to go through, when it went through! Unanimously! And that is BIG news. It’ll mean a lot of changes in the short run, but the longer run gains should make up for the trouble. A single-window for indirect taxation, lesser administration, more transparency, lesser subjectivity in assessments, lesser time in transit and hopefully, a fair sharing-between-states system. It is what every economist had dreamt of.

And yet, there I was, confused. How can the UPA behave so professionally? Now whom will we blame for the low-pace in reforms? When you have all politicians rooting for taking reforms ahead, rather than play their own silly partisan games, it creates a rude shock in the minds of innocent citizens like me. Exactly like putting a Honda driver into a German car.

Epilogue

After driving the Polo for about 10 days, I got my car back. Oh, the feeling! I could have run to it and honked in slow motion! God must have sensed the romance and sent a small drizzle my way.

I immediately sat in my car and then, to my horror, started reflexively moving my right hand to start the wipers. To my consternation, the indicator lights started ticking, while the wipers wouldn’t budge. The radio informed my frayed nerves that “Hafte mein chaar Shaniwar hone chahiye”. OMG. Now I’m a German driver in a Japanese car. Help!

 

 

Tax tamasha!

Dear Reader,

Hi! Here’s a farce on the passage of the GST Constitutional Amendment Bill, which appeared under my column “Tweakonomics” in the Hindu Business Line today. You can see it at http://www.thehindubusinessline.com/opinion/tax-tamasha/article8943703.ece; else read it here directly.

Cheers!

——————————————————————————————-

GST, Amma Tax and a lot of farce!

Clever Guptaji (in concern): What is it, Sir? I’ve never seen you this tired before! Tch, tch, they really shouldn’t make innocent, lazy people attend Parliament. It is such exhausting work!

Netaji (groaning): Oh, the boredom! I tell you, the FM went on and on about “streamlining the cascading effect of taxes and the move from origin-based to destination-based taxes”. I can never quite figure out what the man is saying. There was only one interesting moment in his speech, when he spoke about “compensation for the revenue loss”. I agreed with him heartily on that, but Chidambaram wouldn’t allow me to express my gratitude.

CG (alarmed): Oh, Sir, thank God that Chidambaram Sir restrained you! The States with high levels of industrialisation collect VAT and sales tax. But they stand to lose out, as GST will imply that the destination States get the revenues. Thus, developed States opposed GST till they were assured that they would be compensated for the loss. The FM was talking about compensating the States, Sir, not compensating you! I hope you listened to PC and did not utter a word!

Netaji (uncomfortable): Oh, now don’t you start boring me, Guptaji. I have had enough of this stuff to last a lifetime.

CG (smiling): So Sir, could you participate in the debate at all?

Netaji (indignant): Participate? I tore the session apart with my yelling! You see, I am one of the few Chosen Ones by High Command.

CG: What? You are Harry Potter? The Chosen One?

Netaji (turning red): Now don’t you start getting clever, Guptaji! I meant, we are a small group of people in the inner circle of the High Command. So, when Rahul Baba pretended to fall asleep (that was our signal), we immediately started yelling that GST cannot go through because the PM himself opposed it when he was CM.

CG (dismayed): But you’ve been yelling the same thing for the past two years! What did the PM do?

Netaji (uncomfortable): Oh, he gave us a little wave from the other end of the House and smiled at us. (Suddenly gleeful) But heeheehee! He too became uncomfortable when The BJP Rajya Sabha Economist made a grand entrance into the Parliament later.

CG (interestedly): And, what was HE saying now?

Netaji (laughing heartily): He said the GST is not really a game changer. It is already implemented in 160 other countries, so the tax is not really “Indian at heart”. He also threatened to expose 27 other levies that seemed to be non-Indian. Heehee! That made them uncomfortable. Their own economist!

CG: Sir, did the AIADMK agree to the idea? Tamil Nadu says that as a “producer state”, it stands to lose out crores if the GST gets implemented.

Netaji (face clouding): Oh, they were making a noise alright. Chidambaram made an innocent statement that the GST should be debated properly as it is the “Mother” of all indirect tax reforms. And then, these AIADMK people got aggressive. One of them said they will support the Bill , but you have to name the tax as the “Amma tax”!

CG (mumbling): Yeah, only that was missing. Amma canteens, Amma water, theatres, and now, Amma tax! What did you do, Sir?

Netaji: Baba fell asleep. So on cue, we shouted that the GST cannot be passed because the PM opposed it when he was CM.

CG: Aaaaaaaaaaaaaaaaaaaargh!