Reserve Bank of India (RBI) Governor Duvvuri Subbarao to say good bye to Mint Street after 5 stormy years.
Career bureaucrat-turned-banker Duvvuri Subbarao demits office on Wednesday after a 5-year stint as Reserve Bank of India (RBI) Governor during a tumultuous period of global financial stress that has left rupee plumbing new depths, falling economic growth and high inflation.
While there were brickbats for his tight monetary policy that his critics called hawkish, there were many number of admirers for his stance they considered independent of the government, displaying the Central Bank’s autonomy.
Within days of moving to Mint Street in Mumbai in September 2008 from the North Block where he was Finance Secretary, Duvvuri Subbarao plunged into a crisis situation with the emerging financial meltdown, the worst world had witnessed since the ‘Great Depression’ of 1930s.
India came out largely unscathed from it mainly because of the sound fundamentals of the banking system and strict supervision by the RBI. But what Subbarao will most be remembered for will be the tough monetary stand that he took during the last one and half years when inflation was rising on one hand and economic growth stumbling on the other.
Under his leadership, the RBI raised policy rates 13 times between March, 2010 and October, 2011, testing the government’s patience. RBI’s tough stance brought down wholesale inflation from double digits in 2010-11 to around 5 per cent now and core inflation declined to around 2 per cent.