The RSS ideologue and well known Chartered Accountant (CA) Swaminathan Gurumurthy has been appointed as the non-official part time director of Reserve Bank of India for a period of four years. Along with Gurumurthy, Satish Kashinath Marathe has also been appointed as a part-time non-official director on the board of RBI. Marathe is well known for his long tenure in cooperative banking and he also runs an NGO called Sahakar Bharati which supports cooperatives. The RBI central board has official and non-official directors. The official directors which include the governor and the deputy governor, holds the real power and is responsible for all the decision making. The RBI Act allows ten directors nominated by the government in the central board which is primarily a forum of discussion and not decision making.
The important thing to look forward to the next four years will be how much Gurumurthy will be able to influence the RBI through his ideas without having any decision making power. Gurumurthy has not been supportive towards the previous RBI policies. He was born in Tamil Nadu and is a prolific commentator on economy and finance issues. He is editor of Tamil magazine Thuglak and co-convener of Swadeshi jagaran manch, an economic nationalist organization which supports swadeshi ideas. He first came to limelight for fighting against business practices of the Reliance Company led by Dhirubhai Ambani at that time. He wrote a series of articles in The Indian Express newspaper criticizing the aggressive corporate expansion of Reliance denouncing a culture of corruption within the troubled conglomerate.
Gurumurthy was a vocal supporter of demonetization and called it a fundamental corrective to the economy much like liberalization of the 1990s. According to him one of the main aims of demonetization was to make India a welfare state by attacking black money. “The nation owes a standing ovation to the Prime Minister for taking this unprecedented and high-risk political decision which is a game-changing multi-dimensional effort to take on corruption, black money, protect national security and prevent capital flight out of the nation by hawala”, Gurumurthy wrote in The New Indian Express. He is an ardent supporter of Micro Units Development and Refinance Agency Bank (or MUDRA Bank) for aiding entrepreneurship in MSME sector. In his article he further wrote that, “When the Modi government came it realized that it could not generate jobs unless it funded the 58 million unfunded unorganized businesses which needed a capital of Rs 12 lakh crore — of which just 4 per cent was provided by banks. The government decided on a new financial architecture, the MUDRA bank, on the lines of the National Housing Bank, to focus on them and fund them. But Rajan’s RBI stonewalled it, saying it would lead to regulatory arbitrage — meaning seeking to profit between two regimes — and systemic risk”.
Gurumurthy has also been critical of some of the government schemes like the 3 percent fiscal deficit target which he called an import from the Maastricht Treaty adopted by the European Union. He said that 3 percent target is not required for India and it will hurt the economic growth of the country. He also criticized the RBI for not using its reserves to help recapitalize banks and opposes the privatization of public sector banks. Hence, Gurumurthy is an independent economic thinker with unorthodox economic ideas and he will bring some fresh thoughts in the environment of RBI. Now the important thing to look forward to is that how much he will be able to influence RBI with his ideas.
