(June 18/19, 2016, No. 25/2016)
Weekend Lighter is posted every Saturday @mgwarrier.blogspot.in
Feel free to mail your views on this edition of WL to mgwarrier@gmail.com
Opening Remarks
Akalangalile Prapancham
Remaining connected with good friends enriches your life. Yesterday (Friday, June 18) P R R Nayar telephoned to draw my attention to an article on Anand Narayanan, son of R Narayanan with whom Nayar and I had worked in RBI, Thiruvananthapuram during late 1960’s. Anand has won an award for a series of talk shows on TV on the above subject. Congratulations and best wishes to Anand. A link to the article on him published in The Hindu on June 17, 2016 (Metro Plus, Thiruvananthapuram) has already been posted @Warrier’s Blog.
RBI Governor Dr Raghuram Rajan
On June 18, 2016, in a personal message to RBI staff, Dr Raghuram Rajan has announced his intention to go back to Booth University (Chicago, US) on completion of his present term on September 4, 2016. The message has been shared with public by RBI. Best wishes to Dr Rajan.
Recent responses
Doubling Tax Base
This refers to the report “Double taxpayer base to 100mn, PM to taxmen” (Business Standard, June 17). On the same day the BJP’s new face in the Rajya Sabha, Dr Subramanian Swamy has given a clarion call to abolish income tax(as the money that flows in is not much, according to him!), with a view to improve India’s growth rate to 10 per cent. As PM Modi is known for doing his homework regularly for decades and Swamy is known for off-the-cuff observations, for the present, PM’s wishes will be respected.
Expanding tax base and ensuring prevention of leakages are crucial for the country’s fiscal management. Agriculture need not remain a holy cow and beyond some threshold level, agricultural income also should be taxed, may be at differential rates. GOI could, if these suggestions do not come up at the Rajaswa Gyan Sangam, consider the following measures to improve taxpayer base and make tax inflow increase:
i)                   Make ground level tax officials work with Local Self Government Bodies to identify potential taxpayer families.
ii)                GOI could commit a share from incremental tax collection from the command area of Corporations, Municipalities, Panchayats for economic development of the respective geographic area. This should be in addition to the share of central taxes that will be ploughed back through state governments in the normal course.
iii)              Human involvement is important. The mechanical issue of notices to those who own vehicles or travelled abroad has not fetched the desired results so far.
iv)              There should be clarity in incentives for honestly paying tax and disincentives for hiding real income.
v)                GOI could consider issue of a different, identifiable PAN Card for those individual taxpayers who have paid their taxes properly during the previous five years.
M G Warrier, Mumbai
Course correction*
Apropos Mihir S Sharma's column, "Why Raghuram Rajan matters"(Business Standard, June 15) let it be reasserted that the outrage was not against well-informed, balanced media discussions on public issues; it was specifically against personal attacks on Reserve Bank of India Governor Raghuram Rajan. Rajan has responded gracefully, ignoring the bids to tarnish his image.

Unless exceptional situations materialise, positions such as the one held by Rajan should have a longer tenure of five to 10 years. Rajan should have been appointed for a full five-year term in 2013. But this is what happens when governments take short-term views on crucial issues.

Although past decisions can't be rewound to correct them, if Rajan had been groomed for a year starting September 2013, D Subbarao's term had been extended by another year and Rajan had then been given a five-year term beginning September 2014,  would have been implemented faster financial sector reforms during Rajan's era.

Hopefully, there will now be a rectification by reappointing Rajan - or a more efficient individual, if the government can find one, that is - for a full five-year term from September 2016.

M G Warrier, Mumbai
*This is the nicely edited, published version. I had written:
Informed debate*
Apropos Mihir S Sharma’s column on “Why Raghuram Rajan matters” (Policy Rules, June 15), let it be reasserted that the media outrage was not against well-informed and balanced media discussions on public issues, but it was specifically against personal attacks against Dr Rajan within his entitled personal privacies as different from what he did as RBI governor. As Rajan himself has responded gracefully, ignoring the efforts to tarnish his image by some vested interests, let us not go back to that.
Unless exceptional situations demand, positions like the one now held by Dr Rajan should have a long-term tenure of 5 to 10 years. Dr Rajan should have been appointed for a full 5 year term in 2013. This is what happens when governments take short-term views on serious and crucial issues. I had observed in an article written on the subject during August 2013 (The Global ANALYST, September 2013) as under:
“The only negative in the whole affair is, as on several occasions in the past, once again GOI has opted for a short-term appointment. This time it should have been for a five-year term in the first instance itself…..Ideally, RBI Governor should have an average tenure of five to 10 years. If such a norm was followed, Dr Rajan would have been perhaps the 15th Governor of RBI. Now he is 23rd! All Governors who have stayed in office beyond 4 years have contributed to the strength of the central bank.”
I had even wondered whether the tenure was cut short to 3 years by wrong choice of ‘template’ while preparing the appointment notification! Though there can be no ‘rewinds’ to correct past decisions, one more year of ‘grooming’ for Dr Rajan from September 2013, extending Dr Subbarao’s term by another year and a straight 5 year term for Dr Rajan from September 2014, would have resulted in faster financial sector reforms during the ‘Rajan Era’ in RBI. Hopefully, there will now be a correction by appointing Dr Rajan (or a more efficient individual, if GOI is able to locate one for the present ‘package’ available to RBI governor!) for a full 5 year period from September 2016.
M G Warrier, Mumbai
*On June 18, 2016, in a personal message to RBI staff, Dr Raghuram Rajan has announced his intention to go back to Booth University (Chicago, US) on completion of his present term on September 4, 2016. The message has been shared with public by RBI.
Work-life balance
The review of “Born For This” by Meera Siva (The Hindu Business Line, June 13) gives a deep insight into the content of the book and an inspiring profile of the author Chris Guillebeau. Very few publications like Business Line and Frontline publish such reviews so rich in content giving a real feel of the books under review.
In a market of self-development and career guidance books, where different interests compete to attract readers for various reasons, such reviews help in short-listing the choice. Unlike, say two or three decades ago, when job-hunting was for livelihood or ensuring a secure career progression in one’s profession, today selection of a job or changing an existing one  has several dimensions in addition to remuneration or a secure career path. Even if one is not able to lay hands on the book, such in-depth analyses covering aspects like work-life balance, help readers to make their options better informed.
M G Warrier, Mumbai
Caging the RBI
With reference to “A reset in policy” by A K Bhattacharya (Business Standard, Raisina Hill, June 13) the concern aired in the conclusion, “But a reset in equations gives rise to many difficult situations and spawns controversies” can become real, only if the central government confronts the Reserve Bank of India(RBI) within the latter’s mandated territory of administering monetary policy. It has to be said to the credit of government of India (period 1935 to India’s independence included) that the RBI has been all through manned by competent top management and it’s views were respected by successive governments in New Delhi.
In all these years, politics of the ruling parties or the personal biases of the RBI Governor and his deputies did not, by and large, affect the smooth functioning of the central bank. The game of numbers on the representation on the Monetary Policy Committee (MPC) was an aberration which can be traced back to the partisan Financial Sector Legislative Reforms Commission report, which was a product of circumstances, with a built-in effort to “cage” the RBI. That report will remain only a reference document and as has happened in the case of inflation targeting and constitution of MPC, in future also, decisions on recommendations will be, hopefully, issue-based and taken only after due deliberations and consultations.
In a larger sense, all members of the MPC will be expert professionals in their own fields and will be pursuing national interest rather than breaking into sub-groups within the committee and fighting for Centre or RBI.
M G Warrier, Mumbai
Prime Minister Modi’s address to the US Congress concluded with the following observations:
“Mr. Speaker and Distinguished Members

As we deepen our partnership, there would be times when we would have differing perspectives.

But, since our interests and concerns converge, the autonomy in decision making and diversity in our perspectives can only add value to our partnership.

So, as we embark on a new journey, and seek new goals, let us focus not just on matters routine but transformational ideas.

Ideas which can focus:

• Not just on creating wealth but also creating value for our societies;
• Not just on immediate gains but also long term benefits;
• Not just on sharing best practices but also shaping partnerships; and
• Not just on building a bright future for our peoples, but in being a bridge to a more united, humane and prosperous world.
And, important for the success of this journey would be a need to view it with new eyes and new sensitivities.

When we do this, we will realise the full promise of this extraordinary relationship.

Mr. Speaker, 

My final thoughts and words would reiterate that our relationship is primed for a momentous future.

The constraints of the past are behind us and foundations of the future are firmly in place.

In the lines of Walt Whitman,

"The Orchestra have sufficiently tuned their instruments, the baton has given the signal."

And to that, if I might add, there is a new symphony in play.

Thank you Mr. Speaker and Distinguished members for this honour. 
Thank you very much.” 
Excerpted from S Gurumurthy's article "Modi conquers world to govern India" (The New Indian Express)
"Ten standing ovations! And 69 clapping interventions! Indices of the reception Prime Minister Narendra Modi got from the Joint Session of US Congress when he addressed them as if extempore for 45 minutes on Wednesday (June 8, 2016) during his fourth visit to the US in two years. After his speech, many Congressmen even queued up for his autograph! " 


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