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D. Murali

FOR a grasp of economic happenings "in brief", a good source to look at is the speeches of Mr Y.V.Reddy, Governor, RBI. In his new innings at the Bank, he has opened his score already and there are two downloadable deliveries, not older than a week. The first is about the global economy and financial markets has all of "outlook, risks and policy responses", while the second is a shorter statement delivered at the joint annual session of the Board of Governors.

The plus point about the speeches is that they are packed with information, without your having to consult long tables and graphs. Sentences are short, such as, "Hostilities in Iraq have ended earlier than expected" or "Data on industrial production and trade growth indicate marked slowdown". Also, the guv does not presume knowledge on the part of his audience. For instance, it would be elementary to identify for the all-too-knowing whether something is a positive occurrence or not. Yet, in the interest of a common reader, he plugs in a phrase such as "favourable developments" to mean things such as containment of SARS, rebounding of financial markets, decline of interest rates, end of hostilities and so on, and then contrasts the same with "downside risks" such as labour market continuing to be soft, rise in oil prices and so on.

Yet he is no superman with a remedy for all ills and a prophecy for all queries. Which should explain why we hear him concede: "It is difficult to say as to how and when global macroeconomic imbalances would get corrected". Or, "It is not clear as to what extent the US dollar would depreciate and how the global economy will adjust to that." It is not as if Mr Reddy does not slip into a rhetoric, as when concluding his second speech thus: "Together, we will work towards improving the environment where we see the benefits of economic growth percolating to those who have been hitherto denied and to those who have suffered painful adjustments." Something that, perhaps, does not gel with his nature, because such lines become longer.

A speech that is so packed with thoughts that it is easy to miss out the chain, so banker number one comes to your rescue by itemising as often as it would help. If you had a question in your monetary economics paper on why "contingent credit line" (CCL) provided by the IMF has not been too popular, there are at least four reasons that Reddy would offer: "(a) the entry problem — that is, the fear that access under CCL would convey a negative signal to the market, (b) the exit problem — that is, the uncertainty about the withdrawal of eligibility, (c) insufficient automaticity, and (d) stringent pre-qualifying norms." Likewise, you can find education on the two reasons why further increase in bond yields appears remote; four perspectives of viewing the forex build-up; and two aspects that need emphasis while talking about quality improvement of development assistance.

It is too commonplace for erudite talks to degenerate into mumbo-jumbo with all those abbreviations scattered everywhere. Reddyspeak too has its share of jargon, but the saving is that he explains the jargon he uses: GRH is gross national happiness; FRBM is no ballistic missile but fiscal responsibility and budget management; CAC is collective action clause; MDG is millennium development goal; PEM is public expenditure management; HIPC Initiative is no hip thing because it is about heavily indebted poor country; ROSC is report on the observance of standards and codes; CFT is the combating the financing of terrorism; and ML&FT is a variation of the same with money laundering in the first part. But what is PRSP?

More than anything else, it should give great confidence to have at the helm of our banking system somebody who is able to air views on matters crisply.

Did you know, for instance, that large reserve accumulation reflects lack of confidence in the international financial architecture?

And if you thought the 4.3 per cent growth rate of the Indian economy is too small to comment about, take heart that it was "one of the highest in the world".

When Reddyspeak spills beyond conference rooms, over to the electronic media, perhaps clothed in more commonplace terms and words, we could expect a greater popular appreciation of weighty matters such as money and economics.

Economics@TheHindu.co.in

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