After the RBI trimmed the portfolio of one of its deputy governors, another RBI deputy governor Shyamala Gopinath said, the autonomy of monetary policy was not under any threat but didn't suffer the same consequences
On 8th August, barely two days after the Reserve Bank of India (RBI) stripped its deputy governor KC Chakrabarty of all important portfolios, another deputy governor apparently spoke out of turn too. She even made front-page news, but didn’t suffer the same consequences. On that day, the Hyderabad edition of The Economic Times had a front-page story with a picture which read as follows: “Contradicting the stand taken earlier by RBI Governor D Subbarao, Reserve Bank Deputy Governor Shyamala Gopinath, on Saturday said, the autonomy of monetary policy was not under any threat. Her remarks came two days after D Subbarao’s statement that the autonomy of monetary policy was under threat due to fiscal compulsions. He also said that there should be coordination between fiscal and monetary policies.” The report says that the deputy governor was reportedly in Hyderabad to attend a conference. As it happened, the RBI governor, D Subbarao was also in Hyderabad—which has become a hub for all of the central bank’s activities these days.
There are many amusing aspects to this report. First, we learn from informed sources that Ms Gopinath was in such a panic about the report that she rushed to the airport to catch the governor, before he caught a flight to Mumbai, in order to explain her side of the story. We don’t know what that explanation was; but, clearly, it was good enough to ensure that she didn't receive the same treatment as Dr Chakrabarty. Sources who watched this drama at close quarters say that Ms Gopinath was accompanied by RBI’s communications chief, who was also in Hyderabad. The communication department derives all its power from its ability to block access of journalists to RBI conferences, as well as to the top brass. But a printed newspaper cannot be recalled; interestingly, the news-item is nowhere on the Net. We had to get a physical copy of the newspaper to verify that such a report was even published by the Hyderabad edition! As far as RBI is concerned, it is clearly different strokes for different folks.
One RBI insider has a different take. He says that the RBI is the only organisation where people are routinely punished by being given absolutely no work—although it is very rare for a deputy governor to get this treatment. Since there is no external audit of RBI and it is accountable to nobody, it is never questioned about why public money is being wasted in providing pay, perks and an office to someone who is being punished. Those who are identified for such treatment are invariably senior officers who argue about promotions and postings or contradict the boss or question internal policies and reckless spending. In other words, there aren’t legitimate and legal grounds to sack such officials (who are often efficient officers of high integrity) or proceed against them. They are simply humiliated and ignored. — Sucheta Dalal