Blaming it all on the pandemic has become the best excuse for every inefficiency. Right from the municipal corporations to the vegetable vendor and even some of the e-commerce guys; everybody is taking umbrage under the Covid. But for RBI to be so lackadaisical, not exactly blaming it on the pandemic but leaving it open for interpretation reeks of complete unprofessionalism.
This has probably never ever happened in the recent history of RBI where a policy meet, which is now known as the MPC meet has been rescheduled. The meeting of the MPC members were to deliver a policy decision on Thursday, 1st Oct. Now that has been postponed and the new date is not yet known.
Bang in the middle of the crisis, even at that time, RBI has never missed a MPC meet thus as this time, to cancel such an important event is unheard of. The meet as such would have largely been a non-event in terms of interest rates as it was expected to be kept on hold.
RBI has said it aloud but all can easily draw the inference – there aren’t enough MPC members, what with three of them retiring tomorrow. This is not something which happened out of the blue; their dates of leaving were determined the day they joined so how come RBI did not get even a single candidate?
The tenure of the three external members on the committee -- Ravindra Dholakia, Chetan Ghate and Pami Dua ends tomorrow and there seems to be a gridlock on this decision, between the RBI and the Govt over who will the new three members be.
These three external members are nominated by the Govt and the news is that a selection panel, headed by Cabinet secretary Rajiv Gauba, including Shaktikanta Das, Economic Affairs Secretary Tarun Bajaj, Niti Aayog vice-chairman Rajiv Kumar and Urjit Patel has been roped in to pick the best for the MPC members. What happened then? They could not come up with anyone?
Well, lets look at this the other way – its good they did not hurry-burry and appointed just a rubber stamp. Let the panel really look hard but ultimately come up with members who lend diversity, in terms of the thought process to the MPC. Call cannot be “Yes Minister”; we need to bring in more voices from different facets of the economy. The current external MPC members are all renowned academicians but were they the true representatives of what was actually happening on the ground? When there is no “rule” that all the external members need to be professors, why not a member from India Inc, or say someone from a commercial bank itself or someone who represents the needs of the common man too?
And as one economist rightly said, why not a learned economist who brings in his own forecast model and does not depend on the RBI model alone? Wont that give a more divergent view, a richer debate on the decisions made? Just toeing the line of the Governor or going by the majority mandate is not enough.
The postponement of a policy date now puts tremendous pressure on the RBI to soon come up with new names. Indeed, it will be very interesting to see who the three new external members will be. And hopefully, they will have the wherewithal to guide the country through perhaps what can be called its most difficult time.