Subbarao unveils memoirs: Who moved my interest rate?
What's the story
Dr. Subbarao, former RBI Governor, served at the helm of RBI from 2008 - 2013; his candid memoirs released today shed light on his choppy relationship with the UPA Govt. during his 5 year tenure. Dr. Subbarao's book is replete with skirmishes between the Finance Minister and the former Governor, often attributable to their consistent lack of accord concerning RBI's inflexible rate policy.
Early Life
Who is Dr. Duvvuri Subbarao?
Dr. Subbarao originally hails from Eluru district, Andhra Pradesh. He's a physics graduate from IIT Kharagpur and earned an M.Sc degree in Physics from IIT Kanpur. He topped the IAS examination in 1972. In the late 1970's he opted for a Master's degree in Economics from the Ohio State University and a few years later was accepted into the Humphrey Fellowship Program.
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Dr. Subbarao's immense contribution
In 1998, Dr. Subbarao received his Ph.d in Economics from the Andhra University. The Doctoral thesis was based on "Fiscal Reforms at the sub-national level." Andhra Pradesh in the 90's was struggling with a dire financial crisis; Subbarao is considered responsible for turning things around.
05 Sep 2008
Dr. Vudduri Subbarao assumes role of RBI Governor
Dr. Subbarao, prior to being appointed RBI Governor, served on PM Manmohan Singh's Economic Advisory Council for two years prior to being elevated to Finance Secretary in 2007. Few weeks into his tenure as RBI Governor in September 2008, Dr. Subbarao was required to tackle the mammoth challenge of the fallout of Lehman Brothers collapse that had sent the financial sector in a meltdown.
Evident discord
Discord between UPA Government and Subbarao becomes public
Dr. Subbarao's memoirs recount multiple instances of fundamental disagreements between RBI and UPA Government. In 2012, post RBI's policy statement, Subbarao's memoirs reference a 'public rebuke' by then Finance Minister, P. Chidambaram, which significantly deviated from protocol: an endorsement of RBI Monetary policy by Governmentt. The tacit understanding to keep such differences private was set aside and fault lines were now in the open.
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World Bank
Dr. Subbarao's illustrious career comprised of working with the World Bank for nearly a span of two decades. He was also deputed as the 'Lead Economist' from 1994 - 2004. Subsequently, he was taken on board on PM Manmohan Singh's Advisory Council.
'Walking Alone'
Asserting RBI's autonomy: Price to be paid?
Dr. Subbarao's memoirs contain an entire chapter 'Walking Alone' on disagreements with the former Finance Minister. One such instance refers to the disagreement over reduction in the CRR as per the policy review in June 2013. The fallout of this disagreement was evident in the Government's refusal to extend the tenures of two Deputy Governors despite the RBI Governor's strong recommendation.