RBI’s Viral Acharya: Talking up a virtual storm

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Illustration: Jayachandran/Mint

Illustration: Jayachandran/Mint

A powerful public speech or good oratory has the power to rouse the downtrodden, move nations to war or shape mass opinion. Speeches have an epochal quality about them, capable of defining the age and creating verbal markers to punctuate history’s unremitting march. By that token, the October speech by Viral Acharya, the Reserve Bank of India’s (RBI) deputy governor, perhaps deserves to go down in history as 2018’s definitive talk.

It deserves special mention because it brought to public attention arcane issues like central banking and monetary policy, apart from highlighting the fast deteriorating relationship between the RBI and government. Though the hyphen separating the two is suffused with tension, cooperation between them is critical for the smooth functioning of the economy. Acharya’s speech set off alarm bells that were heard not only in bond and currency dealing rooms but also resounded in cocktail parties and drawing room chatter. Unwittingly, his speech also joined multiple global dots, echoing similar conflicts between central banks and elected governments in the US, Argentina, Turkey, and elsewhere. The speech became an integral component of a classic tragi-comedy: a slow but visible build-up of tension, the threat of a bruising denouement, an anti-climactic rapprochement and eventually the resignation of governor Urjit Patel who was promptly replaced with career bureaucrat Shaktikanta Das.

So why did Acharya vent in public? One version is that he did what all governors have always done in the past: used public platforms for communicating a central bank’s concerns. Communication has become a critical implement in any central banker’s toolkit; it speaks to the public, to power and communicates a nuanced message to markets. The other interpretation is that Patel’s infrequent public appearances may have forced Acharya to come to the institution’s defence and reassert the importance of central banking autonomy. “There are several reasons why enshrining and maintaining central bank independence ends up being an inclusive reform for the economy and, conversely, undermining such independence a regressive, extractive one…”

Some saw it as a desperate, rearguard action by a central bank with its back to the wall. It also sent out signals that the governor was alone, with the bureaucracy having abandoned its support. This became increasingly evident as the government started making veiled threats through carefully orchestrated media leaks. This is how Acharya ended his speech: “As many parts of the world today await greater government respect for central bank independence, independent central bankers will remain undeterred. Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution. Their wiser counterparts who invest in central bank independence will enjoy lower costs of borrowing, the love of international investors, and longer life spans.”

There are many explanations for the likely compulsions that drove Acharya to craft and deliver a speech that got hackles up in Delhi, provided ample ammunition to conspiracy junkies and sent a shiver down the spine of markets. The slow-burn conflict between North Block, which houses the finance ministry, and Mint Street showed signs of rapidly descending into a full-blown bushfire after Prime Minister Narendra Modi’s misadventure with demonetization. It didn’t help when the newly appointed Patel, unusually reticent for a modern-day governor (especially when compared with immediate predecessor Raghuram Rajan), chose to soldier on silently. This created the impression, perhaps misplaced, that he was party to the unilateral decision. Yet, his subsequent actions, markedly punitive for loan defaulters and lazy bankers, seemed to belie the popular impression of a conformist.

The government and the RBI have often locked horns in the past, under different governments, when finance ministers used proxy methods—such as appointing their men as deputy governors, denying renewal of term to career central bankers when regulatory strictures hurt crony capitalists or by creating parallel power structures—to clip the central bank’s wings. However, things never got out of hand. Various sane voices in the bureaucracy used back channels as a counterpoint to the rhetoric in public.

Acharya’s outburst, measured against the speeches by past RBI governors, might seem incendiary. Many past governors have used the public platform to convey a key policy decision or signal a sharp policy departure. However, none was as controversial as Acharya’s. When mapped against all the speeches of 2018, it stands out for launching a thousand opinions about central banks’ operational autonomy and for galvanizing heated public debate whether the government was overreaching or the RBI needed to add accountability to its charter. In that sense, it is perhaps among the most discussed and dissected speech in recent times.

A close second would have to be Congress president Rahul Gandhi’s speech during the no-confidence motion debate in Parliament in June. This address, though unremarkable in its prose or oratory, marked Gandhi’s coming of age. Before the speech, there was this unsure man, struggling to gain his political chops in the face of Modi’s folksy but powerful oratory. After the speech, there was a new-found swagger and a visible ability to husband votes and seats in the electoral sweepstakes.

On a global scale, in terms of its influence over events, it would perhaps have to be the last sentence from Frances McDormand’s acceptance speech at this year’s Oscars: “I have two words to leave with you tonight, ladies and gentlemen: ‘inclusion rider’.” It set off a flurry of questions on all manner of search engines but also impelled the entertainment industry to examine gender discrimination in its employment processes.

Speeches can be of various kinds and tailored for various purposes. Some have a limited impact, some leave their imprint on humankind’s collective memory. Speeches existed even before technology had a way of propagating them and influencing mass consciousness.

It might be instructive to view speech-making (or, at a stretch, demagoguery) and democracy as somewhat joined at the hip. The first stirrings were perhaps felt with the beginning of declamations in the agoras of Athens when monarchy and attendant tyranny gradually gave way to the rudimentary forms of democracy. The popularity of rhetoric in public life of Athens and Plato’s development of dialectic reasoning stand out among the first recorded instances of public speaking. Even earlier, Plato’s teacher and philosopher Socrates’ self defence in public against charges of impiety and corruption of youth are soul-stirring: “Virtue springs not from possessions, but from virtue springs possessions and all other human blessings, whether for the individual or for society.” Plato’s student Aristotle even subsequently taught pubic speaking as it was believed to be an integral component of one’s education. The Grecian tradition threw up some very engaging and inspiring public speakers, Pericles and Demosthenes chief among them.

Many fictional speeches are so high up in the inspirational scale that they are now bestowed with a semblance of reality. A good example is perhaps Mark Anthony’s lend-me-your-ears speech from Shakespeare’s Julius Caesar. The only record of the Mount of Sinai sermon delivered by Moses on God’s behalf (“I am the Lord thy God, which brought thee out of the land of Egypt, from the house of bondage”) exists in Deuteronomy 5 of the Old Testament.

The arrival of the printing press and its ability to leverage the power of the word remained circumscribed because literacy was restricted to the ruling classes. It was essentially aristocrats speaking to aristocrats. Yet, speech as a document could now be archived and studied, circulated and debated. Speeches became tools to question and challenge. Oliver Cromwell or Mirabeau used speeches as to implant the first seeds of democracy in feudal Britain and France, respectively.

As literacy grew, so too did new voices and their ability to spread radical ideas. Vladimir I. Lenin used speech and pamphleteering to great effect, whether to organize workers and soldiers or install a political system that, as a compelling idea, became the default option for half of our planet. “Only the dictatorship of the proletariat and the poor peasants is capable of smashing the resistance of the capitalists, of displaying truly supreme courage and determination in the exercise of power…”

On the other side of the world, M.K. Gandhi was using speech and articles to seek support for a new moral framework that would become India’s mainstay in its struggle for freedom: “Non-violence is the first article of my faith. It is the last article of my faith.” A citizenry ruled by foreign conquerors for almost a millennia was sufficiently inspired by Gandhi’s methods to seek nationhood without taking up arms. Eventually, though, bloodshed could not be avoided. On the opposite side of the scale, British conservatives are still moved by Winston Churchill’s exhortations to war. On the inspirational scale, though, nothing can beat Martin Luther King’s “I have a dream” speech of 1963, which persuaded Guardian newspaper to even declare it the century’s greatest speech.

In the Indian context, speeches made their appearance largely during the Independence struggle. It would, thus, seem that speech-making was not innately Indian. One possible reason could be that the prolonged yoke of foreign rule over the land had stifled education and free thought. The other possibility is that the epics perhaps motivated a differentiated communication mode for Indians, a dialogic engagement. The Bhagvad Gita is a prime example of how discourses, or samvaad, have influenced Indian thought and culture. Even Bhishma’s dying declamation was actually a dialogue, mainly a response to questions from his nephew.

If one had to trace the origins of speech-making in the modern day, it might be fair to credit Swami Vivekananda’s 1893 address to the World’s Parliament of Religions in Chicago. Thereafter, the Independence movement saw a steady procession of impassioned speakers—Jawaharlal Nehru, Subhash Chandra Bose, Vallabhbhai Patel, B.R. Ambedkar, and Bal Gangadhar Tilak—which perhaps laid the foundation for the Constituent Assembly debates and the ensuing Constitution of India. Today, Modi uses the radio to reach out and communicate his thoughts to fellow Indians. Technology and lifestyle changes have affected speeches materially. Television beams out speeches in real time, university commencement speeches by iconic chief executive officers get circulated via email unceasingly. Social media is changing the contours of engagement: US President Donald Trump uses 288 characters to deliver a daily homily to his followers.

Even RBI, the oldest regulator in the country, is adapting to social media and touch-telephony, though the delivery mode of its speeches remain rooted in convention. If, instead of publicly voicing his disquiet, Acharya were to adopt social media as his communication tool, RBI’s relationship status might have simply read “Complicated”!

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