The Reserve Bank of India is well on its way to its centenary. After the conclusion of the tenure of Raghuram Rajan, the UPA-appointed Governor of the RBI, the present incumbent Urjit Patel was specially chosen by the Narendra Modi government for the qualities the Prime Minister’s Office and the Ministry of Finance saw in the reclusive Central banker. Prime Minister Modi, during the period when he was Candidate Modi, made economic growth the centre piece of his agenda, succeeding in convincing tens of millions of voters that he would deliver faster growth and employment than his predecessor, Manmohan Singh. The appointment of the Central bank chief is crucial to the success or otherwise of the economy, hence it would have been after considerable reflection and analysis that both South and North Blocks zeroed in on the present RBI Governor. It is not only the government but the people of India who have sky high expectations of the newest Governor of the RBI. As it is the Central bank, and not the Ministry of Finance, that is in the driver’s seat on monetary policy, it is reasonable to assume that the 8 November withdrawal of Rs 500 and Rs 1,000 notes at less than four hours’ notice and their calibrated replacement by newly designed variants of a different hue of both denominations must have originated from RBI’s Board of Directors. In view of the importance of this decision on the lives of the 1.26 billion people of India, it may perhaps be in order for Governor Patel to make public the deliberations of the RBI Board on this matter, so that the reasoning behind the step becomes known to the public. As the people are being asked to cooperate by bearing up to the, no doubt, very brief period of hardship consequent on the withdrawal of 86% of the money supply of the country, it is only proper that the full facts leading up to this move were made available to them, so that they may understand why the RBI impressed upon the Central government the necessity for taking such a dramatic step, and that too during the festive season when a rise in consumption expenditure is important for economic growth, especially in a climate of low investment by business and industry. The people are with Prime Minister Modi in fighting corruption and black money and cheer each and every effort by him and his government to achieve the goal of zero corruption and zero black money.
Much of the ills afflicting our society owe their origins to black money. Apart from rampant political and bureaucratic corruption, there is also the spread of narcotics and prostitution, both fuelled by undisclosed cash. Every mafia in the country relies on the very blackness of ill-gotten money to ensure its survival and growth. Were the phenomenon of black money to end, India would be a very different country instead of what has for too long been the situation: the only big economy in the world where Indians lack the means to progress in prosperity to the level of their peers elsewhere among major democracies. How is it that people who have their origins in India have become the most prosperous ethnic group in the US and are reaching that same pinnacle of excellence in the UK? Why is it that productivity per Indian is so much higher in Singapore or even Malaysia than in India? The reason vests in the evil of black money, that turgid swamp filled with cretinous creatures feeding off the misery of human beings. After seeing decades of “freedom”, it is a sign of the failure of successive leaders of this country that the economy is still riddled with black money. Mahatma Gandhi, who sought to ensure that each citizen became the change he or she wished in the world, must be in distress at the sight of the corruption and loot that has become commonplace in India. PM Modi was bold enough and confident enough of the RBI Board of Directors to accept their recommendation for withdrawal of 86% of currency. Indeed, the PM himself accepted responsibility for the measure by announcing it himself and by emerging as the champion of a move that is wholly related to monetary policy. The events of the past two weeks have not been such as do credit to the RBI and its history and traditions. There have been far too many tweaks in the policy and far too many gaps in the manner of its implementation. For this, the RBI must accept the blame. Governor Urjit Patel needs to rev up the level of efficiency of the giant organisation he heads and ensure that the Central bank deliver for the PM by ensuring a speedy return to adequate levels of liquidity. Only by doing so can it redeem the trust and confidence of the people of India.