Dr. Subbarao, Governor, RBI,  please keep it up  -  Don't Let These Anti-Poor Politicians and Industrialists Corner You

by

Rajesh Goyal   

Only yesterday I have written an article supporting the move by RBI Governor to continue the status quo on policy rates.    I have elaborated as to how corrupt politicians and dishonest industrialists were pressurizing Dr Subbarao to toe their line for cut in interest rates so that they can enjoy higher  profits.    They are least concerned for the good of the country or our economy.   The worst part is that hardly any head of Public Sector bank has come out in support of Dr Subbarao.  Why ?  Because they too want a cut in CRR or other rates so that they can show higher profits and can continue to keep a lid on the ever increasing NPAs by setting of higher profits by increased provisions for NPAs.

Thus, in nut shell we can say, there were very few who came in open support of upright Governor.   Rather a campaign has been launched to blame RBI' policy for all the mess through which our economy at present is passing.   Dr Subbarao is being blamed for being a hurdle in growth and positive investment environment.   As and when I come across such motivated media reports, I feel disgusted for these mediapersons. 

I feel happy as Dr Subbarao has chosen to take such politicians and industrialists by horns.   In a hard hitting speech which has been covered by ET under the heading "Blame Game Must Stop : Subbarao" , has clearly indicated that he or RBI can not be blamed for all the ills of our economy  or poor growth / investment of Indian economy.  He says "the contention that interest costs impact the economy, is more hype than reality, since the cost of funds account for just about 3% of sales of the corporate world".    He further elaborated by telling his audiances that 'deteriorating government finances and lack of policy action to boost supplies are the risk that could aggravate inflationary pressures in the economy. 

Dr Subbarao has once again shown the guts to call a spade a spade and shown the government is true face and reasons for the present mess of our economy.    In hard hitting argument he said  "If interest rate was the main factor that stifled growth, how do you explain growth in the pre-crisis period when the lending rate was actually higher than current rate?”

I am sure this kind of stand by an upright head of the regulator will send the right signals to the politicians and media persons who will fall in line and do not publish reports which are motivated and against the interests of the country.   The best part of his speech was when he talks about the misery of the poor and need to be hear this silent majority of poor who do not have access to influence media.   He rightly said   "Consumer prices are rising at double digits, eating into savings and pulling down the standard of living for the vast majority. Some labour unions, taxi and auto rickshaw drivers are seeking a raise in wages to fight inflation. “Poor people are hit by inflation. Inflation is a regressive tax, hurts the poor the most. Their voice, silent as it is, must also be heard,”

My good wishes to Dr Subbarao and I hope he will continue to keep high RBI flag to give our economy the right direction.