Managing the Indian Economy

Pulapre Balakrishnan Indian Economy: Essays on Money and Finance by C Rangarajan; UBS Publishers,
C RANGARAJAN has had the sort of career that many an economist would give a right arm for. Here's a man who has divided his working life almost equally between academia and the world of the economic adviser. He has been professor at the Indian Institute of Management, Ahmedabad, member of the Planning Commission and, the crowning glory for a monetary economist, governor of the Reserve Bank of India. And what is more, speaking of the last, Rangarajan has not been just another governor. During his tenure, he has had a significant professional profile, a wide following and has received rave reviews from the financial press. In fact, on the occasion of the annual meetings of the IMF and the World Bank held in Madrid earlier this decade the magazine Euromoney had judged him the best central banker in the world. The last is no minor accolade even as we may allow for the penchant for fashion and predilection for contacting contagion so often exhibited by the self-referential world of international economists. And now from the august perch of the governor of the state of Andhra Pradesh, he has despatched a collection of essays entitled Indian Economy: Essays on Money and Finance. The collection is arranged under the four sections: 'Monetary policy issues', 'Financial sector policy, banking technology and rural credit', ' External policy issues' and The state and the market'. Since this wide range and impressive-looking portfolio deserves much attention I shall review the collection in two parts, which I shall refer to, somewhat unimaginatively, as 'macro' and 'micro.' This distinction, I must hasten to add, is mine and I do not presume that the author will rush to endorse it. Above all it is a convenient classification of the essays presented according to a view of whether they address essentially macro- economic or micro-economic issues. I appreciate that in the process a simplification is effected.