Y V Reddy, The Quiet RBI Governor, Has A Lot To Say In His Memoirs

Y.V.Reddy. Advice and Dissent: My Life in Public Service. Harper Business. 2017.

Journalists who have had to interact with Y V Reddy, when he was in the Finance Ministry and then in the Reserve Bank of India (RBI), were a frustrated lot. “Yaar, ye kuch nahin bolta (Man, he doesn’t tell you anything),” was the perennial complaint.

Fortunately, that trait doesn’t carry over into Reddy’s memoirs, Advice and Dissent: My Life in Public Service. Okay, it isn’t a kiss-and-tell book — that would be very, very un-Reddy-like — but it is a pretty frank account of his days as a bureaucrat and central banker. He doesn’t hold back on the challenges he encountered, the problems he faced and the run-ins he had. Why, he even names some names he refused to when this writer interviewed him for a profile in 2010. But in talking about the skirmishes, he is quite matter of fact and refrains from glorifying himself or painting the other person (usually a political boss) as a villain.

One example: One of the names he does now mention (which he had refused to earlier) is that of M Chenna Reddy, former Andhra Pradesh chief minister. The author says he accepted an offer to shift to Delhi from the state in 1984 because Chenna Reddy’s office had hinted he was not welcome to make the customary courtesy call on the new chief minister. But what he still does not talk about is the reason for Chenna Reddy’s attitude — as a young collector implementing land ceiling laws, he had taken strict action against the politician. Not very many bureaucrats would have refrained from milking this little back story for what it was worth when writing their memoirs.

Most people would be interested in this book to read about Reddy’s two stints in the central bank (as deputy governor and governor). Indeed, the largest chunk of the book is about that. It needs to be that way, because Reddy’s tenure as governor was far-reaching and significant in many, many ways. But the chapters on his bureaucratic career — from an assistant collector to banking secretary — are far more valuable. Barring some details of internal tensions, a lot is known about Reddy’s very significant work in the RBI. This book only throws some light on these tussles. But little is known about the IAS officer Reddy, about what influenced him in the early part of his career and how it shaped him.

The recounting of his years as an IAS officer is important because Reddy’s record as a central banker may have been different if not for that experience. This was not about his knowledge of economics and finance; it was the way he held his ground on crucial issues — and got his way. Given the recent memory of Raghuram Rajan’s run-ins with the government of the day, it is important to read how Reddy managed his own tensions with finance ministers, especially P Chidambaram. The book shows Reddy was more of an irritant for Chidambaram than Rajan was for Arun Jaitley, but Reddy was far more adroit in managing these tensions.

This may not have been possible without the exposure in his early years to bullying and manipulating politicians and navigating social tensions in the boondocks of Andhra Pradesh. There are some lovely anecdotes there that young IAS officers would do well to read. One of those chapters is aptly titled “The Art of Getting Things Done”.

The recounting of his years as a bureaucrat is also important for the picture it paints of India in the late 1960s and 1970s — food shortages, taking paddy from farmers at below market rates for food procurement programmes, implementing land ceiling laws.

Reddy’s account of his days with Andhra chief minister N T Rama Rao (NTR) provides a clue to what may have influenced his view, as chairman of the 14th Finance Commission, that states need to be given more autonomy in designing their own programmes.

The Planning Commission was rigid in funding older programmes when the whole focus of the NTR government had changed. Reddy had to point out that the state government was more attuned to the challenges of the people of that state. The chapter on the 14th Finance Commission is a must-read one in which Reddy explains in detail the reasoning behind giving states more non-discretionary transfers and the debates that took place within the commission on this issue.

Particularly fascinating are the chapters on his stint in the finance ministry — they provide an inside look into the years leading up to the crisis of 1990 and the implementation of reforms in the initial years. However, in assessing what led to the crisis, Reddy is quite magnanimous in excusing Finance Ministry officials for not putting down their objections to the policies that led to the crisis or in strongly opposing them. Now that is like a good bureaucrat — always close ranks when it is officialdom versus others.

Many bureaucrats take study leave to do their PhDs and acquire other qualifications. But few end up straddling the twin worlds of officialdom and academia the way Reddy has done and this influenced his outlook deeply. He talks about one such break which led him to introspect on the nature of the dynamics between the state and the market; this probably made him the nuanced policy maker he later came to be hailed for. He made three observations during this time — that in India, the burning issue was not state versus markets but both of these versus the people; that India was a hard-soft state, hard on 90 per cent of the population and soft on 10 per cent; and the tyranny of the 10 per cent (organised labour, select industrial houses and the rentier class) which determines government policy and corners the benefits of state action.

Like Reddy, other bureaucrats and central bank governors have penned their memoirs. Many of them are well-written but none have readers chuckling and even laughing out loud at places. At the risk of being accused of plagiarising from other reviews, I will have to say that this book makes for a gripping read; it is difficult to put down when one starts on it. The stories of his initial encounters with Chidambaram in the Commerce Ministry are simply priceless.

This is also a book where the end-notes are not just simple listing of references or explaining a few things. They run to 54 pages and provide far more stories, including one about how, unlike other governors, he got a five-year tenure from the start. Constantly going back and forth is a bit disconcerting, but one understands why it had to be this way. Don’t miss the end-notes when reading this book.

If journalists frustrated by him were to read this book, they would say at the end, “Yaar, ye to kaafi kuch bol gaya (Man, he has said quite a lot).”