As the Indian economy and financial markets get increasingly integrated with the global peers, it is time that the Indian government took a serious look at roping in experts on global financial markets in the Reserve Bank of India and the key economic ministries, asserted financial market expert and Charles E. Merrill Professor of Finance and Economics at the Stern School of Business at New York University, Marti G. Subrahmanyam.
Appointment of such experts on international markets (financial, commodities, and services) in key government departments would pave the way for effective policy formulation in improving access for Indian companies to global markets, attracting global capital, and mitigating the impact of global forces on the volatility in Indian commodity and financial markets due to spill-over effects, he said.
“My impression is that our central bank and key economic ministries have very few experts on international markets, with hands-on experience, in key positions. Such experience will include research, trading and management in such markets. Most of our bureaucrats do not have much of an idea about what is happening in international markets, at any level of detail, unlike other emerging market countries I can think of, including Brazil, Turkey and China, which have such experts in key decision-making positions. The only notable exception in our context is the RBI Governor, Raghuram Rajan,” he told The Hindu .
Elaborating further, he said: “Many areas of the Indian economy need strong economic management, whether it is finance ministry, RBI, the departments of industry and commerce, telecom, IT or even agriculture. This also goes for the various regulators in finance and technology, such as SEBI, IRDA and TRAI. In all these cases, one has to take cognizance of international forces, which affect the Indian economy at various levels. While knowledge of Indian realities is clearly important, technocrats with global expertise are essential because many key issues are becoming more and more complex and technical.’’
“Let me illustrate with an example. The country’s forex reserves need to be managed prudently. This is a job for portfolio managers who have worked actively in global sovereign bond markets for decades and understand the nuances of how these markets work. I do not believe that we have many such people in the system. The same goes for the design of auctions for land, spectrum, mineral rights, public sector holdings etc. We need experts with deep knowledge of these matters in the international arena. We cannot have amateur generalists operating in these positions, given the huge stakes involved,” he stated.
