Vishnu H Prasad : An Accidental Civil Servant

Book Review: Who moved my interest rate?

Here is a book I expected to be a drab read, but turned out to be a really engaging read. Duvvuri Subbarao, a retired IAS officer who went on to become the 22nd Governor of the Reserve Bank of India, recounts his years leading the Central Bank for five years.

D Subbarao’s term at the Reserve Bank coincided with a period of global turmoil. Initially beset by the ever looming price rise problem followed by the US sub prime crisis that spilled over to become the Great Recession and that followed by the Rupee depreciation woes, no other Reserve Bank Governor might have had to face similar challenges in recent times. As fate would have it, the fortunes of the Indian Economy would reverse within a week of Subbarao’s retirement.

A person should be sized up based on the challenges that he had to face and judged based on his responses to those challenges. As for the challenges that Rao took on, there is no question about their nature. In a way, he was left with no choice than to confront them. However, all credit goes to Rao in steering the Indian Economy through those troubling years and emerging through the other side without many scratches.

This book is an attempt to recount the decisions that he made in those years and the thought process that went into taking those decision. Reading through Rao, you get a good picture of the economic decision making of the country, the working of the Reserve Bank of India, a first hand account of someone who had to stare the Recession monster in the eye and also the other issues that rocked the economic scene in India.

Rao’s writing style is lucid and to the point and hence doesn’t bore you. As a person who retired as a senior bureaucrat, I was expecting the book to not have the charms that are usually associated with other popular economists. I was proven wrong. The book also serves as a very good introductory course on monetary policy making in India. It also throws light on the entire spectrum of activities of the Reserve Bank of India, which is not limited to monetary policy making or inflation targeting.

The book also provides a good insight into the level of policy coordination that took place at the international level in those days. The way in which the leaders of the world cooperated and coordinated was hitherto unseen and indeed provides much hope for the future of global economy. Rao’s memoir as an insiders account, gives us a ringside view of the events.

Another takeaway from reading this book was the numerous book suggestions that kept popping in. Some of them like portfolios of the poor, Chasing the monsoon etc. have made it into my reading list. It is a beautiful thing when you are able to get more book recommendations from an author you are reading.

Given that Rao’s book was published recently, I was able to connect to most of the events that have been discussed. Given my interest in the stock markets, I found some insights into areas where I was not particularly expecting inputs. For example, the regulation of the micro finance industry in Andhra Pradesh by the legislature and the RBI’s view that it was an act of  legislative overreach by the Andhra assembly was very interesting. It would amuse me later that this same issue goes on to be mentioned in another light in the next book that I would read: Bulls, Bears and other beasts.

Overall, I think the author has done a very good job of recounting his days as the Reserve Bank Governor. History might judge Subbarao’s results as a Governor to be a  “mixed bag”, but it sure won’t judge his work as an author that way. The book is an excellent read and recommended.



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