In his latest book, 'Just A Mercenary?: Notes from My Life and Career', former RBI Governor Duvvuri Subbarao sheds light on the challenges faced during his tenure, particularly regarding the relationship between the Reserve Bank of India (RBI) and the government. Subbarao emphasizes that the UPA government, led by Pranab Mukherjee and P Chidambaram, often pressured the central bank to lower interest rates and present a more optimistic economic outlook, highlighting a lack of understanding of the central bank's autonomy.
Subbarao, who served as finance secretary before assuming the role of RBI governor during a tumultuous period marked by the Lehman Brothers crisis, recalls instances where government officials contested the RBI's estimates and advocated for a rosier economic projection. He expresses discomfort with the idea of the RBI acting as a cheerleader for government policies, emphasizing the importance of maintaining professional judgment and not manipulating public sentiment.
The former governor recounts interactions with both Chidambaram and Mukherjee, noting their differing approaches but shared desire for softer monetary policies. Despite facing pressure from Chidambaram to lower interest rates, Subbarao stood firm, leading to public expressions of disagreement from the finance minister.
Subbarao's memoir offers insights into his career journey and the challenges encountered in economic governance, reflecting on his experiences from his early days as a sub-collector to his tenure as RBI governor. Currently serving as a senior fellow at the Yale Jackson School in the US, Subbarao draws on his extensive experience to provide valuable perspectives on the economic landscape of emerging economies.
