The Importance Of Being Bimal Jalan

Updated: Jun 30 2002, 05:30am hrs
When his seven year tenure as governor of the Reserve Bank of India ends in late 2004, Bimal Jalan would have overtaken RBIs first Indian governor Chintamani Deshmukhs six year tenure (April 1943 to June 1949), but would still fall short of the record seven years and seven months tenure of Benegal Rama Rau (July 1949 to January 1957). But governor Bimal Jalan has already one first to his credit. He is the first RBI governor to have a home page of his own, www.bimaljalan.com!

For a person appointed governor by I.K. Gujrals United Front government, with strong endorsement of his candidacy by both former Prime Minister V.P. Singh and West Bengal chief minister Jyoti Basu, securing a second vote of confidence from the Vajpayee government is no mean achievement. While Dr Jalan had worked with V.P. Singh in the finance ministry, Mr Basu had backed him because he had fond memories of Dr Jalans late father, a Calcutta High Court Judge who had dealt with him kindly in court. So how come the detractors of Gujral, Singh and Basu have again reposed their faith in Jalan What makes him tick

Ask anyone at the RBI or any of his many economist friends and the answer is quick to come - he is a professional, he is balanced and pragmatic, not ideological, he is easy to work with, he is a nice person. Nice guy Jalan, a man with a disarming smile, is a journalists nightmare. When he was Union finance secretary reporters on the North Block beat would feel frustrated by his ability to talk for long hours without revealing one newsworthy information. As governor he has steered clear of all controversy, keeping the media at a safe distance. The best headline you can get out of him these days is that interest rates will soften if and when possible!

At a seminar hosted by a leading chamber of commerce in New Delhi in 2000 where he shared the dais with the Prime Ministers secretary N.K. Singh, Dr Jalan showed no rancour nor did he stand on protocol when his younger colleague from government hogged the limelight. Even when questions were directly posed to the RBI governor,Mr Singh would answer on behalf of the government! Governor Jalan sat back, relaxed and let the PMs secretary do all the answering. Never too intrusive, happy not to have to reveal his mind!

Is it his professionalism or his low profile manner that has contributed to his longevity in a post that is so coveted by so many Perhaps both. His tenure has been associated with a falling inflation rate, a stable exchange rate with managed depreciation, a softening of interest rates and rising foreign exchange reserves. While there have been problems in banking supervision and a rash of scandals in the financial sector, the RBI has not been drawn into any major controversy.

Another factor that may have contributed to Dr Jalans extension is the dead heat race between the two alternative contendors for his job, Vijay Kelkar and N.K. Singh, and the governments inability to pick one against the other. While influential ministers reportedly lobbied with the Prime Minister in support of these two contendors, PM seems to have opted for continuity - an argument that finance minister Yashwant Sinha may well have put forward for his own reasons!

The case for continuity was strengthened after the government decided to send Dr Y Venugopal Reddy, a potential successor to Dr Jalan, to the International Monetary Fund. It would not be advisable to change both the governor and the deputy governor at the same time, the argument went. Since one is going, the other must stay. So a combination of factors contributed to Dr Jalans extension. However, what seems to have scored above all was his image as a sober and stabilising influence, mature and balanced, transparent and honest, accessible and amiable. Dr Jalan has many friends, few detractors.

Dr Jalan entered government service as an economic advisor in the ministry of industry, after a stint at ICICI where he was recruited by its legendary head,the late H.T. Parekh. A brilliant student of economics from Presidency College, Kolkata, Dr Jalan was a student of the marxist economist Amiya Kumar Bagchi and the neo-classical welfare economist Tapas Majumdar. Securing his academic degrees from Cambridge, UK and Oxford, he naturally developed a liberal Keynesian perspective.

Years later, as Chairman of the Prime Ministers Economic Advisory Council, he would sit in Yojana Bhavan and talk at length on how working in government forced him to change many of his views on economic policy. After a long stint as chief economic advisor, Dr Jalan was briefly finance secretary in the V.P. Singh government. Removed by Prime Minister Chandra Shekhar he had hoped to return to that job under Dr Manmohan Singh but was piped at the post by Montek Singh Ahluwalia. Dr Jalans appointment seemed so certain that we at The Economic Times (where I was working at the time) even published a front page report announcing his posting!

Not one to waste his time if left without work, Dr Jalan used his months in Yojana Bhavan to write a fine book on Indias Economic Crisis: The Way Ahead (Oxford, 1991), anticipating many of the policies that took shape after 1991. Over cups of coffee and Yojana Bhavan masala dosas he would discuss his ideas and how they had evolved, urging us to understand the real world and be practical and not ideological in thinking about economic policy. For a young economic journalist like me those were valuable lessons in political economy.

To find out more on governor Jalan, a potential finance minister, just log on to www.bimaljalan.com!