Saturday, September 7, 2013

Can Dr. Raghuram Rajan be the MSD (Mahendra Singh Dhoni) of the RBI team?

Few months back, I was watching the final match between the Indian and Srilankan cricket team in the television. The match was played in West Indies. India needed to score in a huge way in the last over and no body could believe that India can win. However, MSD had thought something different. He was batting with the last batsman and scored consecutive sixes to win the match for India with the last batsman standing at the non striker end. MSD showed the exemplary power of strategic risk taking behaviour, self belief, faith and confidence in that last over.

Months passed: and on 6th September, 2013 towards the late night while reading Raghu Ram Rajan's first day speech as RBI governor, I was being reminded again and again of the last over six hittings of MSD. The first day of the new RBI governor was full of many reform announcements. However, till these announcements are converted to real actions within the macroeconomy, it cant be said that they represent the sixers of MSD. So, which aspects of the speech made me feel reminiscent of MSD's innings. One can list and go through each of the measures and announcements: however, to avoid too much overloading of theoretical rhetorics, I will go through only few ones.

One of the measures relates to the internationalization of Indian rupee. In this tough times of inflation, depreciated rupee and current account deficit, it really takes courage, self belief and faith, trust on the team to think of such a measure. Essentially, this will mean that financial markets have to be more open, liberal for those who receive rupees so that they can invest and plug back in the rupee. This money, can be further be used to finance the existing current account deficit. This thinking at this juncture to me really represented in a way what Dhoni must be thinking when he thought of winning the match for India on that day. It also shows the continuous urge to adapt, change, learn and understand with a drive to take risks for coming out as a winner. This is not only about being technically trained in a profession but more about understanding the context of a situation and taking immediate actions with full faith in decision making.

The new governor's speech also indicated of a regime of stability and transparency and instilling confidence in the Indian monetary policy and rupee. These characteristics of transparency, stability (in tough times) are very key to the success of our Indian cricket team captain. Dr. Rajan as the new captain of the RBI team has also hinted of expanding banking, access to finance for rural people to promote inclusive development. A similar sense of inclusion has also been felt in the other dynamic sports personality who I am comparing with here. It is during MSD's captaincy we have seen cricketers from towns, suburbs coming to the national team and flourish and bloom at the international arena. The entrepreneuring philosophy of reaching out to new talents and including them in the mainstream is reflected in the thinking process of both the two personalities. While this carrot is there, the stick of penalising and communicating to the non performers for the stability of the system also exists in both. However, this comparison is only on the basis of the speech being made and all these will be validated more in the days to come with real actions. In this regard, Dhoni has an edge because we have seen again and again actions from him. However, both seems to be the propagators of non lazyness in the profession. One in cricket, fitness and the other one in banking. Therefore, in banking it will require larger channelization of flow of credit to productive sectors of the economy from government securities. However, in order to move away from this laziness, adequate funds have to come, government finances have to improve and penetration of pension funds, insurance companies need to increase. This needs lot of practical implementation and practice of prudent banking for this to happen. However, the first step is to reduce the lazy thinking. Similar proactive thinking was also being introduced by MSD in the Indian cricket when they were pushed to come out of their comfort zone and experiment with their different cricketing abilities in order to face any changing situation within the game.

However, having said all these, in reality, Dr. Rajan has to implement them with his team to get a larger deserved comparison with MSD. In order to do that, he has to fight a battle with the North Block in the background context of impending elections of 2014. He has to get the strategic buy in of the political leaders, bureacracy and the larger system through which these steps will be implemented. In MSD's case, he did it and am sure he also had to win the trust, faith of BCCI and other governance agents running the administration of cricket within India. I am hopeful that we will see another MSD in New Delhi. However, it will be validated in the days to come. Let us wait and watch till then the performance of the other existing MSD in the upcoming South Africa tour!