|Date of Release||4 Sep 2017|
|No. of Pages||325|
|Price (Undiscounted)||Rs. 699 (Hardcover)|
|Average Reading Time||8-10 hours|
4.3 – Amazon
4.6 – Flipkart
About the Book
This much-anticipated book by Raghuram Rajan is a well-arranged collection of speeches, columns, and lectures delivered by him during the course of his career, especially during his 3-year term as the Governor of RBI. The title of the book “I do what I do,” has been taken from one of his replies at a media interaction. On being asked whether he was a dove like Janet or a hawk like Paul Volcker, Rajan replied: “My name is Raghuram Rajan and I do what I do.” This response made front-page headline dubbing him the rock-star/James Bond.
The book is divided into 3 sections. Section 1 takes us down the memory lane as Mr. Rajan walks us through RBI Days, providing the rationale behind the decisions taken by the RBI. This covers the majority of his book. Section 2 is a collection of his thoughts on the Global Financial Crisis and Section 3 is an assortment of some Occasional socio-economic pieces covering Aid, Capitalism, Anarchy, etc.
The former Governor accepted that while his speeches were his own, the actions were a team effort- well discussed and planned. The book came out one year after he left office keeping in line with the highest professional ethics.
What are the major takeaways?
Rajan, the 23rd RBI Governor took charge when the Indian economy was in a turmoil. The inflation was in double digits, the rupee was under a free fall, current account deficit was at a record high and India’s foreign exchange reserves were depleting. The investor and public confidence were shaky and India was labeled one of the Fragile Five economies.
The well-seasoned, distinguished economist Dr. Rajan got straight to business. Although his task at hand was bringing about macroeconomic stability, he pushed forward the reform agenda once that was achieved. Among many policy initiatives, the governor and his team introduced reforms in the banking sector and in intensifying competition in the financial sector.
Dr. Raghuram Rajan in the book outlines Five Pillars of RBI’s Financial Sector Policies. The bulk of the book is devoted to how these can be strengthened and used for India’s growth and development in its transition from a low income to a middle-income country in the near future.
The first pillar is clarifying and strengthening the monetary policy of the country. He especially focuses on the evils of Inflation and the need to control it. He cites the well-known “Dosanomics” to explain the same. He gives most of the acclaim to Dr. Urjit Patel Committee, the current Governor in the efforts of stabilizing low-level inflation.
Reforming and strengthening Banking Structure is another area that Dr. Rajan lays emphasis on and advocates certain measures in this regard. Entry of new players and bank expansion to increase the access to credit to the underserved section of the country is stressed upon. He also emphasizes the importance of a healthy competition for increasing efficiency amongst of PSU banks and from the private banks. Introducing and embracing technology, attracting talent, and freeing public sector banks from governance challenges are other places that need to be looked into.
Dr. Rajan also talks about broadening and deepening Financial Markets. He calls out for increasing the liquidity and resilience of the markets. He talks about the need for innovation and cites the success of one such innovation “Masala Bonds” towards the internalization of the rupee. He points out that “steady and irreversible reform and ‘mini-bangs’ rather than big bang” was the need of the hour.
He further moves on to the need of intensifying Financial Inclusion by expanding finance to small and medium enterprises, unorganized sector, poor remote and underserved areas. Here again, he stresses on adoption of technology such as mobile banking and Payment Systems in reducing transaction costs, improving quality of financial decision, and creating enabling frameworks
Resolution of distress forms the last fifth pillar of the RBIs financial policy. He stresses on improving system’s ability to deal with corporate distress by strengthening real and financial restructuring and debt recovery. He talks about the importance of “early recognition of distress and fair treatment of lenders and borrowers.” Apart from talking about measures for identifying bad fundamentals, the speech also talks about the need for introducing Asset Quality Review and a loan database, bringing about a strategic debt restructuring to displace errant promoters by converting debt to equity.
In the latter part of section one, Dr. Rajan speaks of several social and economic issues ranging from democracy to tolerance to lending some macroeconomic and financial advice. The book carries lot of support for current Government’s work on financial inclusion, and relevance and importance of Make in India.
A speech covering Federal rate policies and the focus on unconventional monetary policies like quantitative easing, troubled assets relief programs, decoupling theories, etc. are covered under the international issues.
Finally, he stresses the necessity of RBI as an institution in the economy and bats for the independence of the RBI and displays his concern at the attempts by the bureaucracy to tie it down.
The book also has a section on the global financial crisis and lessons to be learnt from the Great Recession.
The last section contains a few pieces on democracy in Iraq, debt relief and effects of quick-fix/ clever solutions, among others.
Who is it meant for and why should you read it?
The book may disappoint those who expected sensationalism specially after the buzz in media regarding his stance on demonetization and the rumors of his clash with the government. Clarifying his stand on Demonetisation in the introduction itself, he clearly states that he thought that there were ways around it and it was not easy to flush out black money since a fair amount was held in the form of gold. He had also communicated his thoughts orally when asked about demonetization. He opined that although there might be long-term benefits, short-term economic costs would outweigh them and there were better alternatives to achieve the same. RBI had later prepared a note on potential costs and benefits, alternatives, and time needed for preparation for this kind of move.
Although the students of economics would find the book really interesting, the easily accessible style would make it a great read for anyone interested in the economy. Although Dr. Rajan has made a sincere effort in presenting the economic concepts in a lucid manner, some concepts may seem a bit hard to understand. Although you might see it as an opportunity to learn something new.
The book, “I do what I do,” displays Dr. Rajan’s writing abilities as an economist and academician. Dr. Rajan tries to eliminate the complexities associated with Economic theories and presents his ideas in a simple yet interesting manner. His ideas are worth reading and reflecting upon.