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‘Easing pain’

As a matter of high principle politicians should avoid dragging heads of supposedly-autonomous institutions into their customary bickering. That lofty…

‘Easing pain’

(Photo: AFP)

As a matter of high principle politicians should avoid dragging heads of supposedly-autonomous institutions into their customary bickering. That lofty sentiment, however, is rooted in the premise that those “heads” strive to retain the independence of the institution, and place interests of the common folk above the political aspirations of the government of the day. 

While the jury is “out” on the role of the Reserve Bank of India in the current demonetisation controversy, it is worth noting that its Governor has not responded to the contention of a Cabinet minister that it had advocated the “once in a lifetime event” – but has spoken of “easing the genuine pain of citizens who are honest and who have been hurt.” Whether the Prime Minister, finance minister etc accept that formulation of Urjit Patel is unclear: it is in considerable contrast to their standard line of “temporary inconvenience” (without daring to put a time-frame on it) and promising long-term gains. And runs counter to their attempt to project electoral success as public endorsement of their bid to dismantle the shadow economy. 

The Governor would be well aware that a genuine “certificate” would have to be issued by professional experts – which has not been forthcoming thus far. The Reserve Bank will have to do a lot more to fulfil its’ Governor’s aim of easing genuine pain, its actions will speak louder than the claims of the political leadership and pliant officials. Unfortunately no “visible” action has been taken, and the claim that the queues are shortening would be contested – particularly by those going to banks/ATMs but preferring to return rather than spend uncomfortable hours in what might turn out a futile exercise. It is apparent that the series of knee-jerk measures announced by the government have not really eased the situation, and the RBI must make positive interventions to restore public trust and confidence in the banking system – a trust unlikely to be regained via the now-favoured “plastic” panacea. 

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The Governor’s assurance that the presses were working at maximum capacity is more reassuring than the campaign for cash-alternatives that only confirm a lack of preparedness for the “mammoth” exercise. Surely steps to popularise debit cards etc should have been taken ahead of pulling 86 per cent of the currency out of the system? That the Governor broke his silence only after much political heat was turned on the RBI suggests that he and top officials were not really sensitive to what they saw around them. Perhaps they were aware, but wary of doing anything that might “undercut” the position taken by the government. Hence a lurking suspicion that Urjit Patel & Co. are being made the “fall guys”.

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