I G PATEL AND M NARASIMHAM
1. From Reserve Bank to Finance Ministry and Beyond by Shri.M.Narasimham ;Published by UBSPD ; Pages 189 ;Price Rs.395/-
2. Glimpses of Indian Economic Policy by Dr.I.G.Patel ; Published by Oxford ; Pages 205; Price Rs.395/-
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Tale Of Two Governors
This year (2002) is the birth centenary of Shri.H.V.R.Iengar, who was the 6th Governor of RBI. The Centennial function, scheduled to be held in August 2002,at Bangalore will evoke a lot of discussion on the RBI.
In this context a welcome development is the release, almost simultaneously, of the memoirs of two successive former Governors of the R B I. Shri.M.Narasimham, who was the 13th Governor for a brief period from 2 nd May to 30th November,is the author of the first book—“From Reserve Bank to Finance Ministry and Beyond” with a sub-title “Some Reminiscences”. The second book is by Dr.I.G.Patel, entitled “Glimpses of Indian Economic Policy—An Insider’s View”. Dr.Patel was the 14th Governor from 1st December 1977 to 15th September 1982.
In March 1977 when Shri.H.M.Patel took over as Finance Minister, Shri.M.Narasimham was Banking Secretary. The Prime Minister at that time had decided that Dr.I.G.Patel would succeed Shri.K.R.Puri. However, Dr.Patel indicated that he would be able to join only in December, that is on completing his U N assignment. H.M.Patel, therefore, decided that Shri.Narasimham would be appointed as Governor after Shri.Puri. Thus,Shri.Narasimham took over in May 1977 as the Governor. Shri.Narasimham was not new to the Bank. He had joined the Bank in 1950 as Research Officer and became the Secretary in 1967. He took over as Additional Secretary, Economic Affairs in 1972. In 1976 he was Secretary, Banking from where he rose to become RBI Governor. He was India’s Executive Director on the Board of Directors of the World Bank in 1978 and was also Executive Director in the IMF in 1980.He retired voluntarily in 1983 to become Principal of ASCI. Shri.Narasimham is the author of two books and was awarded the Padma Vibhushan in the year 2000. The Hyderabad Management Association conferred on him the Life Time Achievement Award.
Dr.I.G.Patel was Governor of RBI (1977-1982), Director Indian Institute of Management, Ahmedabad,(1982-1984) and Director, London School of Economics and Political Science (1984-1990). He is the only Indian to have held this coveted post. Earlier,he was Professor of Economics, Baroda University, Economist in the IMF, Deputy Economic Adviser in the Ministry of Finance, Executive Director, IMF, Chief Secretary and Secretary, Department of Economic Affairs, Finance Ministry and Deputy Administrator, UNDP. He received the Padma Vibhushan in 1991.Earlier for the great work he had done in the London School of Economics, the Queen knighted him in 1990.Several other awards have been heaped on him. He is the author of a number of books on Banking and Economic Policy.
In a country marked by an absence of history writing, both these books play an important part in explaining how the economy functioned during the post-Independence period. It must be made clear that the authors have not attempted to undertake a rigorous study of Banking and Economy but rather recounted their impressions and provided a peep into the working of the Indian economy. Both the books are marked by lucidity of style, grace in presentation and above all their charm is enhanced by light humour.
Shri.Narasimham declares with commendable candour…“My tenure in the Reserve Bank was rather uneventful…My attitude was to carry on and, to use a maritime expression, to see the ship’s steady as she goes.”(Pp 97-98). Shri.Narasimham writes vividly of his entry as a Research Officer in the Department of Research and Statistics in 1950. The interview was conducted by Deputy Governor Shri.Sundaresan who grilled him. Later on when he became Shri.Sundaresan’s son-in-law, he asked Shri.Sundaresan whether when he was being interviewed by him (Shri.Sundaresan) prior to his recruitment, he was interviewing a potential recruit to the Bank or a prospective son-in-law. In his characteristic and blunt manner, for which he was known, Shri.Sundaresan said “both”.(P 20)
Narasimham writes eloquently of his early days in the RBI, especially of “The Gang of Four”—Dr.V.V.Bhatt,Shri.A.G.
Narasimham’s tenure as Governor saw the advent of the National Credit Council and the first steps towards Regional Rural Banks and IDBI.
The most important portion of the book relates to the tough negotiations for India getting the largest loan to any country, viz., SDR 5 billion dollars in November 1981.This was handled by Narasimham with considerable finesse and admirable tenacity (Pp 120-128). The author also writes of his experiences in the Ministry of Finance and the Asian Development Bank and his current spell as Chairman of ASCI. The famous Narasimham Committee reports get a bare mention!.
Readers will relish the joke Shri.Narasimham told Prime Minister Smt.Indira Gandhi when alarums were raised about RBI credit shooting the limit but actually remaining within the sub-limit. When Smt.Indira Gandhi asked him to explain,Shri.Narasimham said, “ I am reminded of a story narrated in the biographies of Bernard Shaw or Oscar Wilde, according to which the young Shaw and the young Wilde were good friends. Shaw’s father had a problem with a squint in his eye and asked Wilde whose father was a reputed eye surgeon whether he would operate on his father and Shaw commented later the operation was so successful that his father began to squint with the other eye!.”. The P M enjoyed the joke(Pp 134—135).
Dr.I.G.Patel, unlike Shri.Narasimham, had a long tenure of almost five years. We thus have a wealth of information on the working of the RBI, the banking system and the Indian economy. Dr.Patel used his influence to restrict nationalisation to major Indian banks instead of wholesale nationalisation. He played a significant role in several important developments like the Second Five Year Plan, the Gold Control Regulations, the Devaluation of the Rupee in 1966, the Bangladesh War and the Second Oil Crisis.
Dr.Patel brings to bear on his book his unique experience and balanced approach to problems. He gives a fascinating account of his college days and one gets vignettes of important personalities like,Shove, Anjaria , Shenoy,etc, Shenoy comes in for a drubbing— “ he was heard but not listened to”. There is a poignant account of Smt. Gandhi’s treatment of Dr.D.R.Gadgil, culminating in his leaving Delhi and dying in the Frontier Mail (Pp—141—142).
Dr.Patel’s sense of humour is gentle. Here is an example from the book.” I was asked how the Aid-India Consortium meeting went and without thinking I said, “Not bad, we were lectured at for eight hours, and we got a billion dollars. Not a bad rate of exchange.”(P 103) Dr.Patel made a candid observation on an imperious Indira Gandhi…. “ I had to make small talk with Mrs.Gandhi till my taxi arrived. Quite casually I referred to newspaper reports about her accompanying the Prime Minister on a foreign trip. She shouted in anger that the newspapers were always after her and that she never accompanied her father on any foreign tour except when he was not well. I do not know what hit her or me. But in retrospect, it is obvious that Mrs.Gandhi was suspicious by nature and saw disapproval and hostility where none existed. Those feelings ultimately clouded her vision and actions and also the reputation which she undoubtedly deserved as a true patriot and talented leader” (Pp 66—67).
Dr.Patel warmly records his close links with the Trade Union leaders in RBI.Sarvashri Nair,Patkar and Mahadik come in for praise. Especially worth mentioning is that Dr.Patel recalls the help Shri.Mahadik, a leader of the Shiv Sena Union, gave him at the Delhi Airport when he was tired and exhausted and was wearily dragging his laded trolley. Shri.Mahadik, who was dismissed by Dr.Patel, not only helped him with the trolley, but successfully negotiated with the Air India staff, guaranteeing his comfort and good accommodation. Recalling this incident years later is a sign of Dr.Patel’s magnanimity (P 178).
Both the books are well written, packed with information and are recommended warmly to all readers, especially those belonging to the RBI family. The volumes are compulsory reading for students, bankers and economists and economic historians.
Shri.M.Narasimham Dr.I.G.Patel
P.P.Ramachandran.
From------ Without Reserve—2002/1
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