Dhaka, Bangladesh
The man who knew

The man who knew

It is rare for civil servants in India to pen memoirs. In part, that is because civil servants are used to working behind the scenes away from the public glare. In part, it may be because many take the notion and law of confidentiality very seriously. In part, it may be because the average civil servant, after decades of writing staid notes on files, don't possess the flair for writing a readable book. Whatever the reasons, India is poorer for it. Recording on files may provide some insight into how policies are made but many of the most critical aspects of policymaking which involve the unwritten word, human interaction and an acute sense of context can only be revealed by those closely involved in decision-making. Therefore, Y. Venugopal Reddy's memoirs, Advice and Dissent, are a most welcome addition to the thin body of memoirs that exist. There are some obvious pitfalls in writing a memoir, chiefly that the author places himself (at the expense of all else) centre-stage of everything and takes himself too seriously. Reddy succeeds in dodging both with a rare wit that is charmingly self-deprecating at times. It is just as well that Reddy has penned memoirs that span his entire life even though he candidly admits that the main reason people were interested in his story was because of his stint as governor of the Reserve Bank of India between 2003 and 2008. Reddy's book is equally a story of a generation of Indians who were born in the decade of independence (Reddy was born in 1941) and who grew up with independent India, its aspiration, its frustrations, its failures and its successes. His is a generation which joined the IAS, not merely because it was a good career or because it brought power and influence, but because it believed in public service and nation building. Needless to say, even at the pinnacle of his career, Reddy's views, whether one agrees with them or not, were influenced by the same spirit of public service and national interest as when he joined the IAS in 1964. And he stood by his views, in the face of pressure. Batting for reforms Of course, there is a need for all individuals, including civil servants, to evolve in their worldview with time. Reddy may have spent a lengthy part of his career in the heyday of socialism but by the 1980s he was acutely aware of the limitations of statism and batted for the 1991 reforms in his capacity as joint secretary in the Ministry of Finance. And yet, he was never carried away by the relative success of India's free market experiment. So when the boom years came in precisely the years he helmed the RBI, i.e. 2003-2008, he had the vision and guts to tilt against the wind and warn those who cared to listen about India overheating and about the dangers of the then seductive lure of cheap global finance. For those with any interest in macroeconomics and central banking, the chapters on Reddy's tenure at the RBI are gold where he writes in great detail about the many (and sometimes conflicting) roles that the RBI and its governor have to perform. Setting the interest rate is the most visible one, but managing the exchange rate, regulating banking, managing the government's debt and guiding reform of the financial sector are all critical roles of the central bank. Again, in a candidness that is a feature of the book, Reddy admits that there were times when he himself was unsure of the best way forward, say on the setting of interest rates. It is rare for a civil servant to admit his fallibility. And Reddy admits it on more than one occasion. The chapter on his relationship with P. Chidambaram, with whom he was reported to have had several differences, is revealing without indulging in unnecessary 'masala', something which may have helped sell more copies of this book but which would have taken away from the gravitas. Sudden transitions It would be a pity if only those with an interest in central banking read this book. The book also offers an interesting narrative on being an IAS officer, the bewilderment at being transferred repeatedly in succession without any good reason (yes, it happened in the 1960s too!), the frustration at being transferred out of a job when you are doing well at it (he was moved from Finance to Commerce in 1993 despite playing an important role in the reforms) and the shock of being transferred to a job only to be told a day later that the PM had changed his mind (Reddy almost became finance secretary in 1998). Despite those setbacks, Reddy went on to become deputy governor and governor of the RBI. Clearly, even in the civil service, competence cannot be sidelined for long nor can integrity (intellectual and financial) notwithstanding the vagaries of the political system. On a note of dissent, if one were to be critical of Reddy's legacy, it would be that his caution on financial sector liberalisation has translated into a stout defence of the status quo. India needs to avoid the excesses of the West, but there is a difference between caution and a permanently closed door. The country still has a long road to traverse in creating a genuinely competitive and inclusive financial system. A piece of advice, for a younger generation of policymakers, IAS or technocrats, who must lead India to a future of greater prosperity, this book is essential reading.

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