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Is The Government Undermining RBI To Please Corporate Rent Seekers?

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RBI deputy governor, Dr. Viral Acharya, while delivering a lecture, made a passionate pitch for central bank’s independence, and warned that any government that tries to undermine the independence of the central bank would end up triggering a financial crisis. This speech brought bad blood between the central bank and the government to the fore. The question that is haunting the people is what made the RBI go public with its displeasure?

The main reason behind the tussle is the Modi dispensation’s muscular approach in promoting the interests of big business. They are well aware of the fact that in this neo-liberal era it is the big business tycoons who nominate the politicians to the top positions. Because the tycoons own the two most important and powerful instruments of control in the country – money and the media. And the people, through their vote, do the rest- by electing one of the nominated politicians to power. In return for this favour, the tycoons want the laissez-faire aka trickle-down economics to be implemented so that they can have the ‘ease of doing business’. In other words, they want their glasses to be filled first.

And what are the nuts and bolts of implementing the trickle-down economics? Lower the interest rates to make capital cheaper, deregulate the banks especially the Public Sector Banks (PSBs) to facilitate the ‘ease of borrowing’ and subsequent defaulting, socialise the private losses as and when required in the garb of fancy sounding, scheme words such as ‘recapitalisation’ and ‘liquidity infusion’.

And who is the biggest hurdle in their path? The Reserve Bank of India (RBI), without whose consent the government can’t push through its plan. That is exactly the reason behind the intense efforts that are being made by the union government to undermine the independence of the central bank.

When Dr. Raghuram Rajan was the Governor of the RBI, Jaitley wanted an interest rate cut. Now anyone who has a basic knowledge of economics knows whose interest an interest rate cut serves. Without an iota of doubt, it serves the interest of the tycoons and the government. A rate cut not only lowers the debt burden of the industrialists but also makes capital cheaper for them. And it also makes it easier for the government to repay its debt. A rate cut, however, results in an increase in money supply, which triggers an inflation in the country.

Now, the inflation is a kind of hidden tax imposed on the poor as it makes their lives more laborious and burdensome since their incomes are not indexed to inflation. It also results in a lower savings rate – because a deposit cut makes the middle class feel uninterested in saving and pushes them towards consumerism. Moreover, the Finance Minister asked for a rate cut when the inflation was not under control. Rajan, however, stood steadfast and resisted the government’s demands, and thereby protected the interests of the poor and the middle class. For his principled stand, he lost an opportunity to get an extension.

If the Modi dispensation wants to serve the interests of the industrialists effectively, it needs to speed up the process of deregulation in banking and financial systems. After the 2008 global financial crisis, which was a direct result of ‘deregulation’, the word acquired a lot of negative connotations and even attracted a backlash in the form of ‘Occupy Wall Street’ movement. Keeping this in mind the politicians and the tycoons, who constitute the pro-deregulation camp, started employing the euphemistic terms such as ‘regulatory forbearance’ to confuse the people. Deregulation is one of the major achievements of this government, and it got rewarded with a sudden and extraordinary spurt in the World Bank’s ease of doing business ranking during the last two years.

The government, however, is facing a major hurdle even with its deregulation mission. The RBI, in addition to administering the monetary policy, also carries out its regulatory responsibilities. Our laissez-faire capitalists, who resent and abhor anything government, borrowed trillions of rupees from the government-owned Banks and defaulted. Now the RBI, through its Prompt Corrective Action (PCA) framework, started tightening things and not allowing any ‘regulatory forbearance’. This is exactly where the crony capitalism infested Modi dispensation started feeling the ‘unease’. In the name of free enterprise and promotion of growth, they want rampant deregulation, as if their tycoon cronies are honest enough to self-regulate themselves. The gargantuan accumulation of the NPAs, stand as a testimony to the crookedness of the tycoons and how they looted the nation with ‘ease’. Now, the government, instead of being strict with the defaulters, is recapitalising the banks with public money and coercing the RBI to deregulate further.

It appears that the government, in its alacrity to enter the good books of Moody’s and get yet another sovereign rating upgrade, started eyeing the reserves in possession of the RBI to narrow down the fiscal deficit. It also plans to use the reserves to further recapitalise the banks with an aim to write off more corporate debt to keep the rent-seeking corporates happy. The reserve bank, however, feels that it needs those reserves to maintain monetary and financial stability. The global economy, owing to its heavily debt-laden nature, is precariously balanced, and financial turmoils and contagions are increasingly becoming frequent. And the distressingly weak banking system also requires the central bank to possess enough reserves to be able to carry out its responsibilities as the lender of last resort.

The government, to undermine the independence of the central bank, appointed people such as S. Gurumurthy and Satish Marathe on the RBI board, who are well-known members of the Sangh Parivar. It is very surprising that Mr. Gurumurthy, who founded the Swadeshi Jagran Manch (SJM) and canvassed for India’s economic self-reliance through savings and small enterprises, is promoting the consumerist, neo-liberal agenda by pushing the big business interests.

The RBI, even in the face of a threat to invoke Sec 7 of the RBI act, which facilitates giving directions to the central bank by the union government, stood steadfast and refused to give any leeway. At one stage there were reports suggesting that the RBI governor Urjit Patel may even step down from his post.  Though the big businesses want the independence of the RBI to be curbed to facilitate ‘regulatory forbearance’, any dilution of the central bank’s independence will invariably lead to a corrosion in investor confidence and may lead to a capital flight. Therefore, sensing the danger of an escalation, the central government appears to have backed off on the issue temporarily.

It appears that this government, in its over-enthusiasm to favour the big businesses and to get rating upgrades, is ignoring the long-term consequences of its actions. Blindly following the tycoon-centric trickle-down economics and getting obsessed with rating upgrades will only result in undermining the central bank and will ultimately lead to the weakening of the economy. Therefore, the current political dispensation, which loses no time in glorifying the nation and making claims to strengthen it, should understand the fact that a nation’s prestige could be augmented not by undermining its democratic institutions, but by further strengthening them. And not by promoting big business interests, but by investing in social infrastructure to enrich human capital.

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An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Read more about her campaign. 

A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

Read more about the campaign here.

A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

Read more about the campaign here.

A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

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A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

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