Classic Raoisms

Thank God RBI Exists 

There has been a lot of media coverage on policy differences between the government and the Reserve Bank. Gerard Schroeder, the former German chancellor, once said, “I am often frustrated by the (Deutsche) Bundesbank. But thank God, it exists.” I do hope fi nance minister Chidambaram will one day say, “I am often frustrated by the Reserve Bank, so frustrated that I want to go for a walk, even if I have to walk alone. But thank God, the Reserve Bank exists”

Interesting Times 

The Chinese have an adage: “May you live in interesting times.” I can hardly complain on that count. I had come into the Reserve Bank five years ago as the ‘Great Recession’ was setting in, and I am  finishing now as the ‘Great Exit’ is taking shape, with not a week of respite from the crisis over the five years.

Getting Out a ‘Padmavyuha

Getting out of an expansionary policy is much more difficult than getting into it. It is like a Padmavyuha in Mahabharata — you know how to get in but not many people know how to get out.

Crossing the River 

People talk about two ways of doing reforms. The Vaclav Havel model which says that “you cannot cross a chasm in two leaps”. There is a Deng model saying you “cross the river by feeling the stones”. We believe that we must cross the river by feeling the stones.

Inflation In Protein-Rich Items 

A feature of recent food price inflation has been the sustained price pressure in protein rich items (pulses, milk, fi sh, meat and eggs). Inflation in protein rich items has generally exceeded both headline (WPI) inflation and inflation in primary food articles.