Today, with growth having slowed and macro-economic challenges in every direction, would the government have benefited from the advice of 'Harvard' economists? asks T N Ninan.
'We get to know secrets such as some of India's top-rated firms do not always make payments when due and many State-owned, listed, enterprises that borrow in bond markets default regularly.' 'Without naming the bank, he says that ever-greening of poor loans by a part of India's shadow banking lay at the doorstep of India's banking, notably 'one private bank'.' Viral Acharya's Quest for Restoring Financial Stability in India won't be music to many ears, observes Tamal Bandyopadhyay.
The HR challenge seems to be one of the most important issues that RBI Governor Shaktikanta Das will have to tackle.
'Those who come from outside are surprised at the relatively small strength of the RBI supervisory cadre, relative to the needs of the country and the needs of the financial sector.'
Economic Affairs Secretary Subhash Garg is the finance ministry's primary liaison with the RBI.
T C A Srinivasa-Raghavan recalls a tussle between the government and RBI when Rajiv Gandhi was prime minister and how it was resolved.
'I suspect the recovery that the banks are going to get out of this IBC is not going to be more than 30 per cent.' 'If you leave the steel industry aside, the recovery rates are not looking very, very healthy,' Jairam Ramesh tells the Rajya Sabha.
'The time has come to incorporate Indian sociology into economic policy.' 'The first step in that direction would be to listen to economists trained in India and not just the US and the UK, argues T C A Srinivasa-Raghavan.
The trolls on Twitter, the rumour mongers on WhatsApp and the serial abusers on Facebook are the enemies of social media.
'Only the coming years will tell whether the government finds this an easy way of relieving itself from its fiscal constraints.'
'I want the prime minister to be punished because he put our country in difficulties as he took this decision without Cabinet approval.' 'When he had already ordered the printing of new currency notes on May 19, 2016, why did he tell lies to the country?'
RBI data show one-fifth of all the infrastructure loans are stressed and the share of such loans in overall stressed assets is nearly a third.
The speed at which he led the central bank in different areas -- ranging from internal reorganisation to inflation fighting, stabilising the currency, taking on rogue corporations, cleaning up bank balance sheets, and opening the sector -- makes one believe that Rajan knew he had only three years to do his job. A fascinating excerpt from Tamal Bandyopadhyay's MUST-READ Roller Coaster: An Affair with Banking.
'...Unless we muck up our policies.' 'We have to become a modernised economy.' 'Our institutions should be stronger. And that is most important.' 'The rule of law should prevail and contracts should be enforced.' 'Above all, we have to recognise the importance of globalisation.' 'It is in our favour at this stage. We should grow and become globally competitive.'
'The Reserve Bank's independence has remained a work in progress, an enduring challenge that the nation has been grappling with on an ongoing basis,' says RBI Deputy Governor Dr Viral Acharya.
Given Indian corporates's high indebtedness, new credit will be used for servicing loans rather than building factories. This is setting us up for more companies on life support and more zombie banks, warns Rahul Jacob.
Three key babus will make room for a new set of officers to carry the baton of Budget programmes.
'If the RBI board forces the management's hand on all the key issues, it should be prepared for resignations by the governor and the key deputy governor, Viral Acharya,' warns T N Ninan.
Although this may not be music to Raghuram Rajan and Viral Acharya's ears, the real reason in my estimation for their quitting is expatriate over-sensitivity, intolerance or arrogance, argues B S Raghavan, the distinguished civil servant.
If the new governor can think out of the box even as he signals that he can bat for the RBI cadre and respect its institutional memory, that will go a long way in getting out of the current impasse.
'There are deeper, underlying, forces at work and we need institutional arrangements to guard against them.'
'I am sure Dr Patra will get the fullest cooperation from the finance minister who needs workhorses, not prima donnas constantly looking to improve their CVs,' says T C A Srinivasa-Raghavan.
'It is like bombing a building with 200 people to kill 5 terrorists.'
'The Jalan Committee has now provided very clear guidelines on how the (RBI's) balance sheet should be looked at, what kind of disclosures should be made, what are the principles on which the Contingency Risk Buffer should be maintained, what should be the revaluation reserves, and the market risk to the Contingency Risk Buffer.'
'We feel there is definitely something murky in the system.' 'Will anyone believe that Nirav Modi will go to a branch and bribe a low-level officer?' 'Just look at the people with whom he had moved around.'
Several Congress leaders interpreted it as a dig at Prime Minister Modi who is yet to address a single press conference in his 54-month tenure.
'Tilting at the Government in English in front of India may make him feel like Joan of Arc, but without a feel for Bharat he will merely be Don Quixote,' says S Muraleedharan, former managing director, BNP Paribas.
Among the states due for election next year are AP, Haryana and Odisha, which have a fair share of agri credit. If these states individually announced debt relief, the combined waiver would be at least around Rs 600 bn to Rs 700 bn. Clearly, this will be a frightening challenge for Indian banks.
'When I came here in 2002, I said you can grow at 8%.' 'And I was told that was crazy, and (now) here we are.'
To do so, the government will have to tackle a number of broad development challenges successfully, says Shankar Acharya
'Who would want to be the man nominally in charge of driving the economy when your boss orders you to swerve it into a ditch of unknown depth?'
'Demonetisation demonstrates that this government is simply too amateurish in terms of economic policy-making to properly address India's deep, deep problems,' argues Mihir S Sharma.
Chidambaram questioned the Narendra Modi government whether its demonetisation decision was designed to convert black money into white.
This is the first time in the RBI's history that a governor is leaving without willing to renew his contract
'The autonomy of essential institutions is clearly under question as the Modi government seeks to influence them politically.' 'The credibility of institutions such as the EC, the CBI, the CVC, the UPSC, the RBI, media, and universities, has been compromised,' notes Zoya Hasan, the distinguished political thinker.
A glance back at some important events that occurred in 2018.
The Indian economy was on an impressive growth path through the first decade of this century till it was brought to an abrupt halt by the policy inertia during UPA2 and the Modi government's inability to restore economic and financial momentum. Fascinating glimpses of what went wrong from Puja Mehra's must-read book The Lost Decade: How India's Growth Story Devolved Into Growth Without A Story.
We need a change in mindset, says the RBI Governor.
That's all it takes to protect an institution -- just one person with no past and no greed for the future, says Shekhar Gupta.
Angry Congress members staged a walkout during Modi's address.
RBI in wait and watch mode as several risks to inflation continue to exist including a sudden reversal of food prices and oil price volatility.
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