D. Subbarao, Governor, Reserve Bank of India

Duvvuri Subbarao was appointed the 22nd governor of the Reserve Bank of India on September 1, 2008, and took charge of Mint Street from Y.V. Reddy, when his term ended on September 5. Subbarao, 59, an IAS officer, topped the batch of 1972 and belongs to the Andhra Pradesh cadre.

He was India’s Finance Secretary prior to his current assignment. Business Today’s Anand Adhikari goes beyond his reported statements and analyses what they actually mean.

“The recent moderation is a cyclical downturn. The India growth story is still intact and credible”
What he really means: The high growth in the Indian economy is expected to continue. Private consumption, the rise in private investment and the surge in exports will continue to drive growth.

“We will monitor the situation closely, be mindful of the implications of our monetary stance on growth prospects, and take appropriate actions”
What he really means: We just cannot expose our economy to runaway imported inflation. There is a strong case for monetary tightening to tackle inflation if it flares up again. The RBI is comfortable even if such measures result in a slight slowdown.

“The financial sector has to become more competitive, efficient and forward looking”
What he really means: Financial sector reforms will continue. There are already a number of reports, like the Patil Committee report on corporate bond markets and the forthcoming Raghuram Rajan Committee report on financial sector reforms. These will be implemented on a priority basis.

“Financial sector reforms have meaning and relevance only if they are anchored in real objectives”
What he really means: Reforms are also required in physical infrastructure like roads, airports, power, etc. There is a strong case to develop a healthy debt market, which will result in funds flowing into physical infrastructure projects.

“The exchange rate policy has served us well”
What he really means: RBI will continue to intervene in the forex market by buying and selling dollars as and when there are sharp fluctuations in the value of the rupee.