(Dr. D. Subbarao is 22nd Governor of the Reserve Bank of
India. He has earlier been Secretary to the Prime Minister's Economic Advisory
Council (2005-2007), lead economist in the World Bank (1999-2004), Finance Secretary
to the Government of A.P. (1993-98) and Joint Secretary in the DoEA, Ministry
of Finance (1988-1993).
As a career
civil servant for 30 years, I have worked at the district level, the state
level and the national level. I also worked at the World Bank, and now towards the
end of my career it is a privilege to come to the Reserve Bank of India. I’ve
also been fortunate to work for a long period in the area of public finance. The
Reserve Bank is different from what I did before as a civil servant in terms of
work content and accountability mechanisms. Work content is of course the
quintessential central bank work which is a much narrower canvas than many of
my assignments as a civil servant. The responsibility is of course much larger,
and accountability as the Governor is at an individual level as opposed to
accountability at an aggregate level in civil service jobs. In a typical
ministry, a civil servant would be responsible to the minister and the ministry
itself would be accountable to the government. As the Governor, I am
responsible at an individual level and I am hoping that my experience in the
real sector would be an advantage in my current position as Governor. India is concerned;
our consumption at 57 per cent of GDP is relatively high for an economy of our
per capita income level. So the important thing for India is to increase
investment, especially in infrastructure, and not so much consumption. I admit
that private consumption has to go up as indicator of poverty reduction, but
what is more important is that investment increases. Several international fora
are appropriate. There is the IMF, the BIS’s bimonthly meetings and the very
effective G20. Important topics such as this must be discussed at all these
fora. And I believe that they are likely to be discussed for much longer than
we think before we reach an agreed view on a minimum acceptable programmer.
Globalization is a double edged sword. Although
it has often helped India, the impact on the real and financial sector is
mainly due to globalisation. India is much more integrated today than ten years
ago, at the time of the Asian financial crisis. There is a view that bank
credit is decelerating. But non-food credit has expanded faster (23.9%) than
the same period last year (22%). So this view is not all that correct, but one
must not exaggerate this piece of information. However, there has been a
reduction in non-bank resources to commercial sector. Urban consumption is
likely to fall from here on, but rural consumption will hold up because there
is no wealth effect here.
Born on August 11, 1949,
Dr. Subbarao holds a B.Sc (Hons) in Physics from the Indian Institute of
Technology, Kharagpur and M.Sc in Physics from the Indian Institute of
Technology, Kanpur. Dr. Subbarao also holds an MS degree in Economics from Ohio
State University. He was a Humphrey fellow at MIT during 1982- 83. He has a
Ph.D. in Economics with thesis on fiscal reforms at the sub-national level. Dr.
Subbarao was a topper in the All India Civil Service examination for entry into
Indian Administrative Services and Indian Foreign Services in 1972. He was one
of the first IITians to join the civil service
