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How Gurumurthy may change the RBI

By Archis Mohan
August 18, 2018 10:29 IST
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With his strong views on Bharatiya economics, his appointment to the RBI board may well presage interesting times, says Archis Mohan.

S Gurumurthy. Photograph: Sreeram Selvaraj for

Photograph: Sreeram Selvaraj for

With the exception of the demonetisation decision of November 8, 2016, the influence that Swaminathan Gurumurthy exerts on Prime Minister Narendra Damodardas Modi, and the economic policies of the government that he leads, has apparently been unobtrusive.

But to understand the compelling clout that the 69-year-old torchbearer of 'Bharatiya economics' wields on the Modi government, and the significance of his appointment as a part-time director on the Reserve Bank of India board, it is important to examine the successful policy interventions by the Swadeshi Jagran Manch, an economic think-tank affiliated to the Rashtriya Swayamsevak Sangh, in the past four years.

Officially, Gurumurthy is the co-convenor of the SJM, but is the leading light of the outfit after the passing away of the outfit's founder Dattopant Thengdi.

Within the Sangh Parivar, the SJM has led the fight against the Modi government's land acquisition Bill, forced the government to offer palliatives to the MSME sector after the implementation of the Goods and Services Tax and, most recently, has ensured that the government puts its MSME amendment Bill in the cold storage.

It is also believed to have convinced Modi to replace the Planning Commission with the NITI Aayog.

But the SJM turned a critic of the NITI Aayog when Arvind Panagariya helmed it.


Those of a certain vintage would remember Gurumurthy as the crusader against the Dhirubhai Ambani-led Reliance Industries Limited in the late 1980s, when he penned a series of articles on the corporate group that he co-authored with the then editor of the Indian Express Arun Shourie in 1986.

Gurumurthy is a chartered accountant by training, and an RSS activist in his commitment.

He is currently the editor of Thuglak magazine, having succeeded the late Cho Ramaswamy, and known for his strong views on Hindutva, against the Nehru-Gandhi family and is a lifelong critic of Tamil Nadu's Dravidian parties.

Gurumurthy is also much admired within the Sangh Parivar for his integrity, that he has stayed away from electoral politics despite his proximity to L K Advani, and more recently to Modi, as also to the lure of any public office.

In his Twitter bio, Gurumurthy states: 'Mahaswami (his late guru, Chandrasekharendra Saraswati, the senior sankaracharya of Kanchi) in whom I saw God advised me out of electoral politics.'

Gurumurthy is proud of his integrity, and was known to cycle to the local RSS shakha even after he had become a successful chartered accountant and could afford a car.

After his appointment to the RBI board, he tweeted: 'Story of my appointment as director RBI. This is the first directorship ever. Never accepted any private or PSU directorship. Not even audit of public sector undertakings or private companies.'

'Wanted to be free to speak. But when pressure built up I am needed to do something in public interest I had to accept.'

Few who have known him are willing to criticise Gurumurthy, with the exception of Mohan Guruswamy, who in the Atal Bihari Vajpayee government of 1998-1999 was the advisor to then finance minister Yashwant Sinha, but quit amid controversy.

Both Gurumurthy and Guruswamy competed for proximity to Advani.

'RBI gets lobbyist and flaky RSS economics purveyor S Gurumurthy as director. Now we must expect the rupee to become $1=~40,' Guruswamy tweeted.

Gurumurthy was born into a poor family in South Arcot district, Tamil Nadu, in 1949.

According to a report in India Today from 1987, a scholarship helped him complete his BCom degree, after which he completed his chartered accountancy and in 1975 started his own accountancy practice.

It was also around this time that he met Indian Express chairman Ram Nath Goenka.

In 1976, Gurumurthy was appointed adviser to the Express, and became a confidant of Goenka.

His chartered accountancy firm counted Vijay Mallya and the Chhabrias as its clients, and he is known to be a mediator in corporate battles.

In February 2011, Gurumurthy was also a source of some embarrassment to Advani, forcing the Bharatiya Janata Party leader to send a letter of apology to Congress president Sonia Gandhi.

Advani had released a report at a press conference then titled 'India's corruption and crime money parked in Swiss bank and other tax havens'.

It was prepared by a four-member task force, which included Gurumurthy and current National Security Adviser Ajit Kumar Doval.

Advani apologised after Sonia Gandhi had sent a protest letter to him stating she held no foreign bank accounts.

Over the years, apart from his criticism of foreign-educated economists, including justifying the departure of Raghuram Rajan as RBI governor, Gurumurthy has also highlighted the problem of 'jobless growth'.

In the run-up to the 2014 Lok Sabha elections, Modi relied on data collated by Gurumurthy that said the job growth in Manmohan Singh years has been a low 2.7 million between 2004 and 2010.

The Modi government's MUDRA -- the Micro Units Development and Refinance Agency -- initiative is also believed to have come from Gurumurthy.

When as the RBI governor, Rajan opposed relaxed norms for lending that Gurumurthy, and even Modi and BJP President Amit Anilchandra Shah, felt that the 'foreign educated' economist didn't understand Indian conditions and was proving to be a stumbling block to employment generation.

However, Gurumurthy has revised his views on MUDRA in recent months, and has criticised the he Modi government to implement the scheme efficiently before bringing in demonetisation.

He also said that the MUDRA initiative 'was stopped by the Reserve Bank, which did not want to give up monetary control' and 'control over financing smaller players'.

His appointment to the RBI board may well presage interesting times.

Photograph: PTI Photo

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Archis Mohan
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