Pendharkar passed away in 2007. The family needs to be commended for undertaking this task. The second book Perspectives on Development: Memoirs of a Development Economist (Academic Foundation — 2008) is by V. V. Bhatt.

The association of these two stalwarts with the RBI ended in 1972 and, naturally, there is hardly anyone in the central bank today who would be familiar with them. Nevertheless, those associated with the RBI, banks and the government would gain tremendous insights into the RBI of the bygone days.

Pendharkar’s book is a series of short anecdotes, giving a glimpse of life in the RBI. This book is not so much about dreary central banking, but of humane aspects. It aptly refers to Governor Eddie George’s remark that central bankers are not pointy-headed monsters, but caring people.

There are various amusing anecdotes such as a child’s perception of his father’s job. Pendharkar’s son, Jayant, now a senior executive in TCS, at the age of five thought that his father’s work was to sit on sacks of coins and eat biscuits! There is also a hilarious occasion when the then Finance Minister, Morarji Desai, on a trip abroad, was curious to know what a nightclub was and he gamely accompanied the officials. At the start of the show, Morarji stormed out of the night club.

There is the anecdote of a public spirited, young economic assistant who was being harassed by the police for rushing a road accident victim to the hospital. The State government pressurised the RBI to dismiss him. Pendharkar strongly defended the young man and refused to oblige the authorities. There is also the case of a hammal in the bank who became an Indian Chess Champion.

There was resistance to promote him, but Pendharkar relentlessly pursued the case till he was promoted. As part of his everyday work, Pendharkar would look for a bachelor — not for his daughter — but for the Bank of Zambia! The central banker hit the right choice by deputing Dr N. A. Majumdar who acquitted himself so well that the IMF chose him for five country assignments before he retired as Principal Advisor of the Department of Economic Analysis and Policy. Incidentally, Dr N. A. Majumdar was a columnist for Business Line.

There are other insights into the pioneering works on company finances for which the RBI is still the pre-eminent source of information as also for balance of payments. Today’s generation of central bankers has little or no knowledge of the withdrawal of Indian rupees from the Gulf countries — an issue which the present central bankers need to imbibe if the rupee becomes, even in a limited way, a reserve currency.

While the RBI in the early 1990s executed the shipping of gold with great precision, during 1960-61, India bought and shipped the yellow metal to enable the country to meet its gold portion of the enhanced IMF quotas.

During the period, Pendharkar headed the Economic Department (1961-72); he was involved in virtually every policy decision and the personal insights he provided on issues such as the nationalisation of banks, setting up of the UTI and the rupee devaluation of 1966 are invaluable. Incidentally, had Pendharkar had his way on the structure of the UTI, corporates and banks would never have been allowed to invest in UTI and the series of crises may have never happened.

Like most central bankers, Pendharkar was modest and caring. Those like the present writer who had the privilege of working under him would pay homage to him.

Dr V. V. Bhatt’s memoirs are in a different style. He was an active participant in the Quit India movement and at the early age of 14, he was sentenced to two months imprisonment in Sabarmati jail. It was characteristic of Bhatt not to tell his disciples about his achievements.

Chapter 3 of Bhatt’s book At the Reserve Bank of India, 1953-1972 is indeed invaluable as it covers the heydays of economists in the RBI. During this period, the Economic Department was at its productive peak. The RBI was the avante garde of pioneering work undertaken by Indian economists.

Path-breaking work was undertaken inter alia on estimate of savings, flow of funds, distribution of income, formulation of the basic structure of the Plans, monetary policy, financial institutional development and public finance. Writings by leading RBI economists such as Messrs Chadavarkar, Bhatt and Khatkhate were published in a number of reputed international journals.

To quote Bhatt: “The Research Department during 1951-1972 was one of the most creative and effective departments, even amongst other central banks of developed and developing countries.” Bhatt raised the pertinent point as to why the high standards of the Research Department fell after 1972. Bhatt’s conjecture is that the “RBI itself became subservient to the government” and “even the needs of the Research Department — although able economists — did not inspire or encourage young economists to do significant research.”

While not wishing to controvert Bhatt’s indictment, I would like to set out a few points.

First, the RBI-Government conflict was acute in the 1950s, culminating in Rama Rao’s resignation. Second, the last major recruitment of economists in the RBI was in 1968. Thereafter, the regular recruitment virtually stopped with the trade union activity.

Bhatt would recall the torrid union militancy in 1969-70, when Pendharkar got no help from the authorities and fresh recruitment was frozen. Third, let me candidly stress that the loss of Messrs Chandavarker, Bhatt and Khatkhate was a lethal blow to the Economic Department and, moreover, a number of reputed economists left the RBI to join new financial institutions — IDBI, UTI and Nabard. Fourth, the pre-eminence of the Economic Department was largely lost with carving out monetary policy work outside the Department.

Fifth, the general side-departments were able to break out of the ban on recruitment by 1972 and many economists joined those departments, some rising to pre-eminence in the top management.

Lastly, it is to the credit of Dr C. Rangarajan that, after contentious litigation, he fought the total ban on fresh recruitment without any compromise, and from 1984, there has been regular recruitment in the economic and statistics departments. Today, the Department of Economic Analysis and Policy has technically qualified economists all along the hierarchy and their work is second to none. The two books by Pendharkar and Bhatt are collector’s items and those with interest in the Indian financial sector should treasure them.

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