Raghuram Rajan analogy entertains, not informs
Reserve Bank of India Governor Raghuram Rajan may or may not be a cricket fan, but he appears to be inspired enough to have drawn an analogy between the game and the country's economy at a think-tank event in Washington recently. It's not clear whether the comparison hit the right chord in a country that does not play cricket, though its people may well have heard of Sachin Tendulkar. Nevertheless, Mr Rajan believes that Indians are mercurial in their opinion on both. Fans shower our cricket players with adulation when the team is doing well and heap abuse when they hit a bad patch. And the same is true of the economy, the Governor points out.
He is right about the reactions, but wrong in everything else. Cricket is a game, economy is not. If the best of players fail at times, it's to do with their form, which is temporary. But the economy fails because of mismanagement by the Government, and, unlike players, it rarely bounces back in a month or two. The slump in economic growth that the country is going through did not begin yesterday, nor will it end tomorrow. It is the result of sustained policy paralysis on the part of the Congress-led UPA Government, and of decisions that were either wrong or taken at the wrong time. Neither the Prime Minister nor the Union Minister for Finance is a swashbuckling Virender Sehwag or a dynamic Gautam Gambhir — two players Mr Rajan named by way of examples and who are battling for form and to retain their place in the Indian team. Mr Rajan said the people elevate cricketers to the status of god, “disregarding the weaknesses that actually exist”. That may be so, but what's the point he is makingIJ He’s saying: ‘You, the people, praised the economy sky-high one day, and now you are cribbing. How unfair!’ Is itIJ The people have a right to be upset and angry when they are made to pay for the callous indecisiveness of their elected representatives, just as they have a right to be furious when cricketers, whom they have given such love and affection, flounder repeatedly. Mr Rajan must remember that public anger did not flood the media when things began to go wrong; it came about after policymakers in the Government failed, again and again, to stem the damage over the years.
As regards glossing over weaknesses when the going is good, surely that is something which the Government, and not the people, must answer for. In his words, the “go-go years” were between 2002 and 2012 when growth averaged eight per cent. Actually, the period virtually ended in 2011, when the fault lines began to emerge in dangerous proportions. The ‘weaknesses' which he talks about were becoming evident by then. They ought to have been fixed when the going was good and when harsh measures would not have sounded that harsh. But the Congress-led UPA Government did not. Mr Rajan is a distinguished economist and he knows the truth.