ArpitGarg's Weblog

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Posts Tagged ‘rbi

Raghuram Rajan: Sanskrit, Brahmins and Finance

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rajan.jpgA lot has been said on the Raghuram Rajan tenure extension. Swamy is a known critic of Rajan and has written to PM about it. Which is fine, as it his fundamental right to share his views. Few people have asked me my views about Rajan. I have stumbled a couple of times on this question. The reason being where do I begin to evaluate how good or bad he is.

The roles and duties of RBI Governor are not easy to understand for a common man. No disrespect to anyone, the whole concept of economy is a fake and unreal. It’s same as Sanskrit to common folk. Brahmins made Sanskrit a God Language, they are the only ones who know it and hence are self proclaimed people who can talk to God. Thereby making themselves important in society. Same is the mumbo jumbo of economy and finance. There is nothing natural and obvious about it. People like me who work in this field, spend time to by-heart the scriptures. We become just like Brahmins in this sense.

I can bet on my life that 99.9% of population doesn’t even know what RBI Governor does. How can we then evaluate his work? Just like 99.9% population doesn’t even know what the Pandit chanted during their wedding ceremony in Sanskrit.

So what do we do? Do we listen to the Brahmins of Finance how good or how bad Rajan is? One school of thought says that whatever Rajan or any RBI Governor does shows effect only in long term (5-10 years). Hence at this point you can’t evaluate on basis of results as we don’t have the results yet. You can only evaluate him on basis of results of what he has done 10 years ago. Some complex and self serving logic, isn’t it?

About this all saga, what I don’t like the most is, many a people says he is a rockstar, tall dark handsome types, speaks well, carry himself well, dignified, renowned. I mean what the hell! Why does all this matter? Another school of thought says Rajan has a global image. Not may Indians have it. And hence lot of NRI’s are supporting him. They get to say, “Rockstar Rajan is an Indian”. They get some pride in it and quench their bruised souls/self-respect in the foreign land. It is not coz they understand Rajan or his policies.

For me it’s too complex to be able to evaluate. Hence I agree with PM Modi on this. It is an administrative issue. It should not elicit media interest. When 99.9% of us don’t even understand Sanskrit, how can we evaluate Rajan. If there is no one better than Rajan, it is more scary. If we can’t find an Indian out of 130 cr people, who is better than Rajan, country is anyways going to hell.

So for all those who support Rajan, please do, but don’t say there is no one else better. It is an insult to other 130 cr people. For those who oppose Rajan, well you might know Sanskrit more than me.

Written by arpitgarg

May 28, 2016 at 7:22 pm

Indian Economy Strong: Funda-mentally

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Last few days have witnessed regular assurances from finance ministry, RBI governor, CEO of leading Indian banks as to how India would weather the global financial storm. All the assurances had one thing in common, “The fundamentals of our economy are very strong”. What these financial fundamentals really are? How to understand them? Well, I have one approach ready for you. As they say “Cinema reflects the Society”, let’s start our search for the economic fundamentals via the fundamentals of Indian cinema.

“Thakur, jaan pyaari hai toh Tijori ki chabiyaan nikaal”. Who doesn’t remember this legendary line? Immortalized by Thakurs ranging from Kanhaiyyalal to Madanlal and Dacoits cum Robinhoods ranging from Raj Kumar to Sunil Dutt. Another such scene is where the greedy Thakur opens his Tijori to lend money to the poor Kisaan at high interest rate. Here the most important fundamental is Tijori. Our society too cherished this personal Tijori. Down the years, the Tijori got replaced by a bank locker for quite a few. Barring the recent trends, we are not known to be ardent investors. We do save money but most of us do not invest in other than the popular LIC policies. We all have such Tijori’s which keep our money safe and sound if not reap returns. Before you point out the decreasing worth owing to inflation, keep in mind that we usually keep our savings as gold, silver etc. But the Tijori persists.

“Kaam ho jaiyega Seth. Paisa mere Swiss bank account mein pahunch jaana chaiye”. This corruption and surplus black money has helped avert the mortgage crisis in India. Consider a house with market value of 1crore. Usually one pays 50lac in cash and 50lac via cheque. This ratio may vary from 40:60 to 45:55 or vice versa. The cash is what is usually called number 2 ka paisa. For the rest 50lac, we apply for a loan. Even if the property rates fall to say 80lac (from 1cr initially), unlike Americans we don’t forego our property to the bank. After all the current market rate is still greater than the loan due. So the black money in property business has not let mortgage crises come to India in the way it has rattled US. (for more read http://www.swaminomics.org/articles/20080330.htm)

“Madam hum ICUC bank se aaye hain. Aap loan chuka dijiye warna hum bahut kameeney log hain”. This dialogue delivered with pure sincerity in the movie “One Two Three”, gives us clear insight as to the low default rate in India. The loan is distributed via agents and settled via another set of agents, while the bank sits pretty. Should the leading banks go the legal way, it would take them at least 20 years to settle. Agree or not, this so called extortion has kept the so called fundamentals of our economy sound.

“Bhaisahab yeh Mangal-Sutra girvi rakh leejiye”. Nirupa Roy in need of money for the treatment of her sick son. Here mangalsutra is the key. Most of the Indian families have household jewellery. Ask your mother for confirmation. Regardless of the bank balance, there have to be sufficient diamond/gold/silver ornaments to be worn at various ceremonies. This domestic wealth is the one which has helped many a family sail through the dark times.

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