RBI Governor Raghuram Rajan enlivened last week’s IMF-World Bank annual meetings in Washington. Though the remarks about India being a one-eyed man in a world of blind were not made officially at the meetings (it was an off the cuff remark to a journalist), they certainly shook up the atmosphere during the Fund-Bank meetings, which are usually stodgy affairs where world leaders mouth pious platitudes about the world economy.
Unsurprisingly, Rajan’s remarks set off a minor storm back home. Though Finance Minister Arun Jaitley was circumspect in his criticism of Rajan’s remarks, both Minister of State for Finance Jayant Sinha and Commerce Minister Nirmala Sitharaman were more forthright, saying Rajan’s choice of words was unacceptable.
To his credit, Rajan apologised to the visually impaired, saying that he didn’t mean any offence to them, but he also made a spirited defence of the import of his statement. He said his remark ‘andhon mein kana raja’ should be seen in the context of his overall remarks, where he argued that despite posting over 7 per cent growth, India still lagged other BRICS economies in most economic and social indices, especially in per capita income.
Though India and China were at the same level economically in 1960, today an average Chinese is four times richer than an Indian and the Chinese economy is five times larger than ours. He also said it would take 20 years of above 7 per cent growth to ensure a decent standard of living for most Indians.
Being ‘politically correct’
Rajan went further and even defended his choice of words, explaining that sometimes, one has to use provocative language to be heard. According to Rajan, using “more correct words” could lack “zing and therefore the ability to persuade”. In defence, he even quoted Mahatma Gandhi’s famous words: “An eye for an eye would make the whole world blind” — observing that if Gandhiji had used more politically correct language, the import of his statement would have been lost.
He also said, perhaps with tongue firmly in cheek, “if we spend all our time watching our words and using politically correct language, or hedging everything with caveats, we will be dull and not be able to communicate.”
The RBI Governor copped a lot of unfair criticism for his remarks, and no one can dispute his comment that, “we have to go a long way before we can claim we have arrived.”
But what’s remarkable in this whole saga is that a central bank chief spoke his mind, thus inviting a healthy debate on the issue, instead of getting cowed down or browbeaten — we don’t see that happening often!
Callous government
In this article, I would like to go beyond Rajan’s pragmatic assessment of the Indian economy. Bragging about India being a bright spot when large parts of the country are reeling under a drought is more disturbing than Rajan’s choice of words.
By the Government’s own admission, 330 million people and 256 districts are currently affected by drought. The newspapers and TV news reports are filled with reports of how parched parts of rural Maharashtra and northern Karnataka are, and how people are suffering from acute water shortage. The situation is no better in Gujarat.
In this context, the government patting itself on the back for being a “bright spot” is downright callous.
Even though the wholesale price index has remained in the negative zone for the 17th straight month, the 34.4-per cent surge in prices of pulses in March should worry the government.
The only silver lining in the cloud is the above normal monsoon predicted this year by the Met Department, Skymet and some other weather forecasters. So, all eyes are now on the sky.