The Hindu : C. Rangarajan a visionary, says RBI Governor

Online edition of India's National Newspaper
Saturday, Nov 29, 2003

National

National

C. Rangarajan a visionary, says RBI Governor

By Our Special Correspondent

NEW DELHI NOV. 28 The Governor of Reserve Bank of India, Y. V. Reddy, said his predecessor, C. Rangarajan's concepts were valid even today.

Releasing a two-volume book "Select Essays on Indian Economy" by Dr. Rangarajan at a function here today, Dr. Reddy said Dr. Rangarajan had initiated a series of reforms in monetary policies when he was at the Bank and they were paying off now.

"Among other things, he pioneered the concept of inflation threshold, a concept which is visiting us again today. His book revealed that he had anticipated problems and issues way back in the `70s and the `80s, which are still relevant today. In that sense, he is a visionary."

Dr. Reddy pointed out that the book was marked by academic rigour and scholarship and was predominantly focussed on India. "It is rare for an economist of international repute that Dr. Rangarajan is, to focus primarily on India, but that is what he has always done."

Bimal Jalan, former RBI Governor, presiding said the book, a gift to the younger generation, should be prescribed for mandatory reading in universities and academic institutions.

"Our universities and institutions are starved of current economic literature and now they have two books on various aspects of the Indian economy. It is indeed a gift for the younger generation."

In his presentation, Dr. Rangarajan, who is currently the Chairman of the 12th Finance Commission, said the selection of articles for the book had been done carefully and it dealt with three basic issues — monetary policy, fiscal policy and the external sector.

The articles provide a glimpse of the recent economic history of India, ranging from the times when high cash reserve ratio (CRR) and statutory liquidity ratio (SLR) were the norm. The interest rates were determined by Reserve Bank and there were different rates for different types of loans.

On fiscal deficit, he said there was some misunderstanding and unnecessary controversy. "The question to be asked is what is the optimal level of fiscal deficit."

He pointed out that though the Government could borrow at low interest rates today most of the States were still feeling the debt overhang. ``It would be necessary to provide them with debt relief and we are looking into that," he said, referring to the 12th Finance Commission's mandate.

A number of distinguished economists, including the former Finance Minister, Manmohan Singh, attended the function.

Printer friendly page
Send this article to Friends by E-Mail

National