RBI board should play like Dravid, not Sidhu: Rajan

Agencies
November 6, 2018

New Delhi, Nov 6: Amid mounting tension between the Reserve Bank and the finance ministry, former RBI governor Raghuram Rajan on Tuesday said the central bank is like a seat belt in a car, without which accidents can happen.

Pitching for respecting the institutional autonomy of the RBI, he said the central bank has the liberty to say no if the government pushes it to be lenient.

Ahead of the November 19 meeting of RBI Board, he said the objective of the board is to protect the institution and not serve others' interests.

"The RBI is something like a seat belt. As a driver, the driver being the government, it has the possibility of not putting on a seat belt but of course if you do not put on your seat belt you get into an accident and the accident can be quite severe," he told CNBC TV18.

Historically, the relationship between the RBI and the government has been precisely this – the government wants to focus on improving growth and it does all it can within the limits set by the RBI which are based on financial stability.

"So, the government will push, will try and get the RBI to be more lenient," he said, adding the central bank would examine them in close details and in reference to risks to financial stability. "We (RBI) have responsibility for financial stability and therefore we have an authority to say no," he said.

The RBI led by Governor Urjit Patel and the government have not been on the same page on different issues for some months now. The disagreements came out in open when RBI Deputy Governor Viral Acharya in a hard-hitting speech said failure to defence central bank's independence would "incur the wrath of the financial markets".

It later emerged that the government had used a never-before-used provision of the law to seek resolution of issues, including the easing of NPA norms, so that banks can kick-start lending and support growth, and transferring more dividend to boost liquidity -- issues which the central bank thinks cannot be relented.

"Of course the RBI doesn't say no out of petulance. It says it because it has examined the situation and believes that this take implies too much financial instability," Rajan said. "I think that relationship has gone on for a long and the fact that the RBI says no is not new. The government can keep asking and say please consider this, please consider that but at some point, it says okay I respect your decision, you are the financial stability regulator and I back off".

"Once you have appointed these Deputy Governors and Governor, you have to listen to them because that is what you have appointment them for, they are your safety belt," he said.

On the issue of the government citing Section 7 of the RBI Act that gives it powers to issue directions to RBI Governor on issues of public interest, Rajan said it would be best if each side respected each other's motivation and thoughts.

"And ultimately the RBI after listening to the government and hearing what the government's issues were provided the best professional answer it could and historically it has done that. I have no doubt it is doing that today. It has a responsibility to fulfill to the nation. It has to listen of course but at the end of it, after listening it has to make a decision because ultimately it has that responsibility," he said.

On the role of the RBI board, he said its role historically has not been to take operational decisions but to focus on broader strategy as well as ensure good governance. "So, they are there to ensure that the government's money is well spent in the RBI, for example, the RBI doesn't pay itself inordinate salaries and so on but also to serve as a sounding board which is why we have people from different walks of society, very eminent people," he said.

"So, my sense is the objective of the board is to protect the institution, not to serve others' interest; it is to protect the health of the institution but also to provide wide, sensible advice. The aim of the board is to be Rahul Dravid -- sensible, thoughtful and not, with due respect, Navjot Sidhu," he said.

On the state of the economy, Rajan said the situation is "much better" on the inflation front, for which both the government and the RBI deserve credit.

Also, India is growing faster than most other countries but there is a need to create jobs and there is "probably need (to do) somewhat more than where we are today.

"Where there is more worry is on the fiscal deficit front and here I am not talking just about the central government fiscal deficit which has been coming down but the aggregate fiscal deficit. Even as the central government is bringing it down, the states are taking it up. When you look at the total you find that over the last 3 or 4 years the aggregate fiscal deficit has actually gotten slightly worse and not better," he said.

Besides, the current account deficit (CAD) is blowing out partly because of the relatively weak exports and partly because of the price of oil has gone up. "It has come down recently but it is a risk that we cannot ignore at this point," Rajan said.

On the problems facing non-banking finance companies (NBFCs), he said the central bank needs to examine the liquidity problem much closer and solve the issue by putting liquidity in the market.

"I think the markets are somewhat nervous but I don't think given that NBFCs account for 17 to 18 per cent of assets, that this is an unmanageable problem. I think we can manage it, we have to look carefully at it, see what is really a solvency issue, what is a liquidity issue.

"Certainly on the solvency front, it is up to these privately managed entities to raise equity at this point when they still have the capacity and shore up their balance sheets. There is a tendency sometimes to run to the government and say please bail me out. I think first they have to exhibit everything they can do on their own before the government even contemplates anything on that sort," Rajan added.

In general, central banks, he said, avoid lending to direct entities. Lending to direct entities involves credit evaluation and central banks are not in fiscal function of bailing out entities.

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News Network
June 13,2020

New Delhi, Jun 13: About 56 per cent of children were found to have no access to smartphones which have emerged as essential tools for online learning during the coronavirus-induced lockdown, according to a new study that surveyed 42,831 students at various school levels.

The study ''Scenario amidst COVID 19 - Onground Situations and Possible Solutions'' was conducted by child rights NGO Smile Foundation with an aim of analysing the access to technology.

The findings of the study showed that 43.99 per cent of surveyed children have access to smartphones and another 43.99 per cent of students have access to basic phones while 12.02 per cent do not have access to either smartphones or basic phones.

A total of 56.01 per cent children were found to have no access to smartphones, the study said.

"Concerning television, it was noted that while 68.99 per cent have access to TV, a major chunk of 31.01 per cent does not. Hence suggesting that using smartphone interventions for enhancing learning outcomes is not the only solution," it said.

At the primary level of education (class 1 to 5) 19,576 children were surveyed while at upper primary level (class 6 to 8) 12,277 children were surveyed. At secondary level of education (class 9 to 10) 5,537 children were surveyed and at higher secondary level (class 11 to 12) 3,216 children were surveyed.

The survey based on which the study was conducted used two approaches - over the telephone wherein the NGO reached out to the children whose database it already had -- students enrolled in various education centres of the NGO -- and second was through community mobilization wherein community workers went door to door to get answers.

The survey was conducted in 23 states, including Delhi, Gujarat, Maharashtra, Karnataka, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, Uttar Pradesh, Haryana, over a period of 12 days from April 16 to April 28.

The lockdown induced by the COVID-19 pandemic in March prompted schools and colleges to move to the virtual world for teaching and learning activities. However, many experts say the digital divide in the country may turn online classes into an operational nightmare.

As per official statistics, there are over 35 crore students in the country. However, it is not clear as to how many of them have access to digital devices and Internet.

Santanu Mishra, co-founder and executive trustee, Smile Foundation, said the findings clearly show that the digital divide is a real challenge, and multiple approaches need to be implemented to cater to all across the nation.

"As an exercise before we start any programme, we do a baseline study to understand the on-ground challenges so that our programmes can bring in real work and real change. With the onset of the pandemic, following indefinite school closures, it is more important than ever to understand the situation and how can we ensure that children are given quality education. Through this, we understand that customized modules need to be built in accordance with the channel of communication," he said.  

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News Network
March 29,2020

New Delhi, Mar 29: Prime Minister Narendra Modi on Sunday said that people should not think of COVID-19 quarantine facilities as a prison and spoke with two survivors of the infection during his radio show 'Mann Ki Baat' to establish that it was curable.
The Prime Minister spoke to coronavirus survivors -- Ramagampa Teja and Ashok Kapoor - and urged them to share their success against the infection with people.
The Prime Minister asked people to listen to the survivors who had successfully defeated the coronavirus.
"I have spoken to a few people who were infected from the virus and speaking to such people. While I tried to boost their morale they also lifted my spirits when I talked to them," he said.
Speaking to the Prime Minister during the show, Ramagampa Teja, an IT professional, who tested positive for COVID-19 after returning from Dubai, said that he was frightened when he tested positive for the disease and could not believe that this has happened to him.
He said even his family was very stressed after finding out his COVID-19 positive status. "But their test results came negative, which I took as a great blessing. And since then, there were improvements every day," he said.
Teja was admitted to a government hospital in Hyderabad and was released after 14 days as he successfully overcame the infection. "The first few days were the hardest but the dedicated doctors and nurses at the hospital ensured that I recovered," he added.
He asked people not to be afraid of being quarantined. "People feel that going into quarantine means going to prison. They should know that the government quarantine is for them and their families. I want to emphasise that people must get tested and do not fear quarantine," he added.
The Prime Minister congratulated him and his family and asked him to share an audio clip of his experience. "I would like you to make an audio of your experiences and share it on social media so that it goes viral and removes fear from people's minds," the Prime Minister said.
The Prime Minister also spoke to another coronavirus survivor, Ashok Kapoor, six members of whose family in Agra were tested positive for the deadly virus.
On being asked by the Prime Minister whether they had feared for their lives, Kapoor said, "We were not scared as we received excellent cooperation from the doctors and support staff at Delhi's Safdarjung Hospital."
The six of them were shifted to Delhi and put under quarantine for 14 days where all of them successfully recovered from the infection.
The Prime Minister also commended the spirit of Ashok Kapoor and said: "Your experience came in handy for all. My best wishes to you and your family."
He also urged the Kapoor family to spread awareness regarding COVID-19 in the way they see fit. "Please spread awareness your way and you can feed whoever is hungry, look out for the poor and also spread awareness to people urging them to follow the rules," the Prime Minister said.
"If everyone follows the rules, the country will be saved," the Prime Minister said.
The Prime Minister also thanked the people involved in ensuring the continuous supply of goods and services in the country and advised them to "follow all the safety precautions, take care of themselves and their family members."
Earlier in his address, Modi had asked for the forgiveness of all countrymen, and especially the poor, for the nationwide lockdown in the country in the view of the novel coronavirus. He had then termed it a necessary measure needed to defeat the infection in India.

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News Network
February 10,2020

Hyderabad, Feb 10: All India Majlis-e-Ittehadul Muslimeen (AIMIM) chief Asaduddin Owaisi continued his tirade against PM Modi and Amit Shah against Citizenship Amendment Act (CAA), National Population Register (NPR) and National Register of Citizens (NRC). "We are ready to take bullets in our chests but we will not show our papers.

We are ready to take bullets in our chests as we love our country," Owaisi said further.

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