I had the privilege of spending an hour with Dr. Y.V. Reddy on Saturday morning at the RBI Staff College Quarters in Chennai as he was on his way back from Pondicherry to Hyderabad. He is as sharp as ever.
Later in the evening, he forwarded two of his speeches for me to read – one from 1997 and one from 1996. The first one is the title of this blog post and the second one – in 196 – was on central bank communication.
The 1997 speech was a great read. Amazingly impressive that he found time to read so much and remembered to quote from them too.
The mention about Rajaji’s contribution was noteworthy. Also, economics being a science somewhat closer to astrology was a terrific observation.
This was a very good one:
If you are a good economist, a virtuous economist, he said, you are reborn as a physicist. But if you are an evil, wicked economist, you are reborn as a sociologist.
This is a great sentence:
In fact, it can be argued that there are no facts without values since one notices facts when one looks for them, and the process of looking for certain facts presupposes some predilections reflecting one’s values.
Also, he subtlely took a position on the issue of Swadeshi vs. Videshi economists:
However, the contribution of Indian universities to senior level positions in Government, as economists, is not very significant. It would be too simplistic to explain this away in terms of bias against pure Swadeshi economists. …..
There is another interesting factor in employment of economists and statisticians that we experience in the Reserve Bank. We are not bad pay masters by Indian standards. We in the Reserve Bank find that although a large number of candidates appear for the entrance examinations, the required number are not able to meet the minimum standards prescribed by us.
This is an important advice, especially to the people around the present government:
Even as interactions are increasing among other countries, we seem to become defensive. I submit that we should seek advice from all around, but keep our own counsel.
I liked these lines by Henderson:
It is my contention that Government economists perform their most effective professional work when they speak plainly and do not trim their views to suit the presumed wishes of those who consult them; in other words, when they deliver their best analysis of reasonable policy options in fair and comprehensible terms.
This is similar to the views expressed by Isher Judge Ahluwali and I.M.D. Little:
In fact, it is a civil servant s dharma to advise an elected Government freely and at the same time defend the policies that finally emerge.
I would say that this is how an economic advisor to the Government, working inside the government, must behave.
His caution against public grandstanding by economists working for the government is much needed, even now:
There are issues of packaging some economic measures for effect , and canvassing public support for a proposal (as distinct from explaining or elaborating a proposal) – especially in the media or industry associations. There may be some merit in such actions but soon they can spill over into an alien territory viz., that of politicians.
Overall, it was indeed amazing to note that Dr. Reddy had managed to draw from so many rich references and, as always, he had succeeded in weaving together a rather thoughtful speech. I had not come across this one before.