Saturday, October 08, 2016

Moving from Green cards to Trump cards


Recalling a dated piece on the request of a few readers. Dr. Rajan is back to Chicago but I would like to believe, just like them, he still belongs to India

The RBI governor’s metaphorical caveats are more significant for the man on the street than his transient rate announcements for the men on the Street. Wish the inexorable banker conveys them in the language of the street.



RBI governor Raghuram Rajan speaks with genuine concern for the common man but the only problem with his impeccable communication is that it is not inherently inclusive unlike his plans for India. In sharp contrast, enlightening a westerner on India’s unique problems is a cake walk for him. Consider this quip that hits bull’s eye "If you are an outsider looking at India, learn to filter out both the irrational exuberance and the excessive pessimism. We're subject to both. You will become manic-depressive if you follow our moods".

But back home, when he says India is an “island of relative calm in an ocean of turmoil”, only the cream of the crop, including professors and aficionados of the English language, gets the message right. All his forewarnings necessarily travel in a limited sphere where they are comprehended but hardly conceded, for obvious reasons of course. Most corporates, not just market men, don’t wish to look beyond the rate arithmetic, which has the effect of downplaying Rajan’s prudent observations including the need to make low inflation a collective responsibility of the RBI, government and the industry. Worse, tangents are thrown back in good measure to sideline his truisms. A case in point was his appeal to real estate developers to push demand through price cuts and thereby erode the mountain of unsold inventories. The weight of this argument called for an acknowledgment from all sections including banks but all they did was to make a strong case for teaser loans. Nothing to take away from the NPA-proof nature and demand-generating prowess of teaser loans as endorsed by a leading bank but Rajan’s dressing-down on inflated real estate pricing called for a more healthier admission, certainly not a myopic snap alleging his poor comprehension of the product.

Rajan’s occasional slippages add to his woes. Lashing out at banks in explosive outbursts is not always a good idea, ditto for stream-of-consciousness annotations on the economy that spur the media to raise doubts on his perceived equation with the government, especially when the RBI has been found wanting in few crucial areas. Among other things, it has done little to curate its economic data in order to make more credible policy pronouncements. We all know the myriad challenges in collection, collation, computation and curation of economic data which are the basis for a variety of key economic and business decisions – from formulating policies and monitoring prices to fixing escalation clauses and computing dearness allowances. The move to make foreign borrowings cheaper than internal debt has unknowingly made corporate leverage a road rage of sorts. And notwithstanding the governor’s pertinent observations on the thorny issue of NPA, every RBI intervention yet seems more palliative than curative. Thanks to the ambiguity that surrounds it, the governor’s stance, even to the neutral observer, appears a hazy blend of severity and dispensation.

No wonder, most of his incisive comments don’t get the circulation they deserve, leave alone approval. If the RBI wishes to earn the public’s trust, as Rajan has time and again reiterated, then acting against future inflationary threats is not enough, more so in an environment replete with vested interests who are vying to trace his fault lines. The essence and credence of his intervention need to be articulated for the common public at large. Like how RBI has credibly spearheaded the financial literacy initiative, it needs to demystify the Guv’s prolific speeches and media briefs in the language of the common man. Agreed, the Guv is not meant to win Facebook likes, but he needs to be heard, if not liked, by those millions with no access to Facebook.

They need to know about his track record, as also his tenacity to defy criticism and yet learn from it, in a language they understand. They need to know in commensurate detail about how banking access is being eased through business correspondents, payment banks, and point-of-sales machines, how lending is being facilitated for farmers, self help groups, and small businesses, how credit information bureaus, collateral registries, and debt recovery tribunals are being upgraded, how repayment discipline, like business ethics and commitment to hard work and quality, is crucial for economic growth, how easy access to credit comes with strict penalties in the event of defaults, how the RBI has developed a Charter of Consumer Rights following public consultation, how Bank boards have been urged to adopt right-protection frameworks, how RBI is mulling over institutionalizing best practices while strengthening field visits to check frauds and other functional deviations. It’s only then will they comprehend the quintessence of his inflation-fixation as also the credibility of his track record - how he assumed office when inflation was furiously moving up and the rupee was abysmally going down, how he and his prolific team got inflation down to record lows, how they boosted forex reserves, how they are gradually transforming the banking sector. It’s only then that they will grasp the meaning of “vocal borrowers and silent savers” better than what most economists and media columnists have.

Hindi and other languages are more than a bridge between the banker and the customer; they can be a conduit between RBI and the common public. Rajan has already delivered on his promise to make a Hindi speech, now he needs to make his office more accessible to the common man. And that does not mean he should shun Keats and embrace Premchand, for in a nation of people who are not known for their reading habits – whether city-bred or pastoral - neither of the greats would help make an impression.

Putting up website documents in Hindi is just one step towards this inclusive mission. Making the RBI website even more user-friendly would be a crucial stride. May be a few Master Documents, updated on a real time basis, can help lay users know the gamut of RBI’s inflation agenda and development initiatives at a glance. Maybe the RBI can organize innovative online and offline public awareness campaigns to convey the moot points of its agenda. The only communication that currently reaches the common man is about him, not by him, that too in bits and pieces of black and white where he’s either sketched as a Rockstar with superhuman skills or an elitist operator with little regard for the real India. He’s neither of the two, yet his absurd admirers and derisive detractors are ever keen to script his ignominy whenever he’s perceived to be disproving his allegiance to either of the two identities thrust upon him.

May be the Guv could take a cue from our PM whose simple-yet-sharp acronyms like ‘3Ds: Democracy, Demography and Demand’ ensure an instant connect with classes and masses alike and whose unique style of messaging inspires common people to respond to appeals like Jan Dhan Yojna and willful subsidy surrenders. If Rajan selectively adopts this approach to reach out, no politician would dare to make an issue of his Green card, for he would no longer need to prove his citizenship in his staple allegorical vein. The nation will do the needful on his behalf in plain vanilla terms. The language of the people might then become his trump card. There’s no activism more powerful than the one that springs from the grassroots.

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