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Raghuram Rajan's Economic Case For Tolerance: Are The Development-Crazy 'Bhakts' Listening?

03/11/2015 8:24 AM IST | Updated 15/07/2016 8:25 AM IST
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Reserve Bank of India (RBI) Governor Raghuram Rajan listens to a question from a journalist during a news conference at the RBI headquarters in Mumbai, India, Wednesday, Dec. 18, 2013. India's central bank surprised many Wednesday by keeping its key interest rate unchanged despite the worrying rise in inflation. (AP Photo/Rafiq Maqbool)

It's easy to dismiss writers, intellectuals, film makers, scientists and historians who protest intolerance as "anti-national", "anti-Hindu" or even "jihadis". However, when the Governor of the Reserve Bank of India makes a speech calling for tolerance and respect, you know even the people helming India's financial system are rattled by the growing intolerance around the "politics of beef" and other divisive issues.

Raghuram Rajan's convocation address titled "Tolerance and Respect for Economic Progress" at the Indian Institute of Technology, Delhi, will go down as a gem of a speech. RBI governors generally comment on the economy and monetary policy, which is what the financial markets and business journalists expect them to do. I've covered Rajan's predecessor, Duvvuri Subbarao, as a financial journalist and never once did he comment on social or political issues.

"Narendra Modi's central plank in the 2014 general elections was vikas, or development... What we have got instead are politics around beef..."

Raghuram Rajan's speech is part reminiscence, part economic commentary and a wholehearted plea for the right to question and challenge. Rajan, himself an alumnus of IIT-Delhi, narrates interesting anecdotes from his college days. These are the usual things that all regular college students do: long for a chance to hang out with the opposite sex, attend concerts, nurture extra-curricular interests, play sports or simply sit outside and look at the stars at night. He attributes this to a liberal attitude on campus which allowed students to become more open and questioning in their outlook.

The central theme in Rajan's speech is "India's tradition of debate and an open spirit of enquiry". By linking it as a critical condition for economic progress the RBI governor is making a sound economic case for tolerance.

This is important, because Narendra Modi's central plank in the 2014 general elections was vikas, or development. People voted for the NDA government for bread-and-butter issues like providing jobs, curbing inflation and kick-starting the economy into double-digit growth. What we have got instead are politics around beef, the welfare of cows and a host of other irrelevant issues which would be comical if they weren't so tragic!

Already one person in Uttar Pradesh has died because of rumours (later proved false) that he ate beef. Others have been attacked, films banned. Beef has become the most offensive four letter word in India today!

But, coming back to Raghuram Rajan, his speech mixes subtle references to the pluralistic and open tradition that has been a norm on college campuses in India. The Spic Macay concert is a reference to Indian classical music, which is a mix of Indian, Persian and Central Asian influences. And which college student hasn't been to a rock concert? One can have equal appreciation for ragas and rock.

Rajan asks: What does an educational institution or a nation need to do to keep the "ideas factory" open? The answer is to encourage the challenging of authority and tradition and to rule out the imposition of a particular view or ideology.

Expanding on this theme the RBI Governor says that an environment that encourages the questioning of received wisdom without the fear of being targeted for it is one where ideas will grow and flourish. This is an intellectual eco-system that fosters innovation, which is critical for economic growth.

Surely the bhakts of India should understand this argument. After all, one thing they have been consistent about is the need for development. Anyone who questions this receives violent abuse on social media and is branded "anti-national".

Raghuram Rajan should know a thing or two about questioning received wisdom. In 2005 the then chief economist of the International Monetary Fund delivered a paper that argued that financial development had made the world riskier.

"Will Raghuram Rajan be labelled an anti-national who is against the development of the nation? Will he be asked to bugger off to Pakistan?"

The setting was the Kumbh Mela of Central Bankers, the annual gathering of economists at Jackson Hole in the United States. Alan Greenspan, then considered the architect of financial development was being feted there as the greatest central banker ever. Remember, this was before the great economic meltdown of 2007, when the world economy was in sizzling form.

In his book Faultlines, Rajan writes that the reaction to his paper made him feel like "an early Christian who had wandered into a convention of half-starved lions." Subsequent events proved Rajan right.

Further on in his IIT address Rajan says that when you do upset an individual or group it is necessary to explain why you have done so. This requires the offender and offendee to debate rationally and have the courage to change their views if they cannot supply empirical arguments to back up their assertions.

This is exactly what we are missing in India today. Argument has degenerated into shouting and labelling people you don't agree with: "presstitute", "anti-national", "jihadi", "Sanghi", "chaddiwalla" are now the de facto terms of the debate in the polarised culture wars of this country.

Raghuram Rajan is presumably making a plea for maintaining the spirit of openness that characterized his stint at IIT. But consider what is happening today. The government is trying to fill its people in key positions in a wide variety of educational and cultural institutions.

Nuclear scientist Anil Kakodkar resigned from the governing body of IIT-Bombay, err Mumbai, following differences with the Ministry of Human Resource Development over the selection of directors for IITs. A report in Catch News says that the Ministry junked the earlier selection process in order to get its favoured candidates shortlisted.

Rajan's speech mentions Raja Raja Chola and Akbar as historical figures who promoted a spirit of inquiry, deriving from earlier Hindu and Buddhist traditions of dissent.

It will be interesting to see how this speech is received by bhakts. Will Raghuram Rajan be labelled an anti-national who is against the development of the nation? Will he be asked to bugger off to Pakistan? It would be difficult to smear Rajan, but I wouldn't be surprised if it happened.

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