Yaga Venugopal Reddy (born 17 August 1941) is an Indian economist and a retired
Indian Administrative Service
The Indian Administrative Service (IAS) is the administrative arm of the All India Services of Government of India. Considered the premier civil service of India, the IAS is one of the three arms of the All India Services along with the Indian ...
(IAS) officer of the 1964 batch belonging to Andhra Pradesh cadre. Reddy served as governor of the
Reserve Bank of India
The Reserve Bank of India, chiefly known as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for ...
(RBI), India's
central bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
, from September 2003 until September 2008.
In 2010, he was awarded India's second highest civilian honour, the
Padma Vibhushan
The Padma Vibhushan ("Lotus Decoration") is the second-highest Indian honours system, civilian award of the Republic of India, after the Bharat Ratna. Instituted on 2 January 1954, the award is given for "exceptional and distinguished service" ...
.
Early life
Yaga Venugopal Reddy was born on 17 August 1941 in a
Telugu
Telugu may refer to:
* Telugu language, a major Dravidian language of India
*Telugu people, an ethno-linguistic group of India
* Telugu script, used to write the Telugu language
** Telugu (Unicode block), a block of Telugu characters in Unicode
S ...
family in Patur village,
Kadapa district
Kadapa district (officially: YSR district; formerly: Cuddapah district) is one of the twenty six districts in the Indian state of Andhra Pradesh. On 19 August 2005 nomenclature of “Cuddapah” has been changed as “Kadapa” by the Governm ...
of present-day
Andhra Pradesh
Andhra Pradesh (, abbr. AP) is a state in the south-eastern coastal region of India. It is the seventh-largest state by area covering an area of and tenth-most populous state with 49,386,799 inhabitants. It is bordered by Telangana to the ...
, India.
Education and honours
Reddy received his M.A. in economics from
Madras University
The University of Madras (informally known as Madras University) is a public state university in Chennai, Tamil Nadu, India. Established in 1857, it is one of the oldest and among the most prestigious universities in India, incorporated by an a ...
, India, and his PhD from
Osmania University
Osmania University is a collegiate public state university located in Hyderabad, Telangana, India. Mir Osman Ali Khan, the 7th Nizam of Hyderabad in 1918 , He released a farman to establish OSMANIA UNIVERSITY on the day of 28 August 1918. It ...
,
Hyderabad
Hyderabad ( ; , ) is the capital and largest city of the Indian state of Telangana and the ''de jure'' capital of Andhra Pradesh. It occupies on the Deccan Plateau along the banks of the Musi River (India), Musi River, in the northern part ...
. He also holds a diploma in economic planning from the
Institute of Social Studies
The International Institute of Social Studies (ISS) of Erasmus University Rotterdam is an independent and international graduate school of policy-oriented critical social science. ISS was established in 1952 by Dutch universities and the Neth ...
,
Netherlands
)
, anthem = ( en, "William of Nassau")
, image_map =
, map_caption =
, subdivision_type = Sovereign state
, subdivision_name = Kingdom of the Netherlands
, established_title = Before independence
, established_date = Spanish Netherl ...
.
Reddy was awarded the degrees of Doctor of Letters (
Honoris Causa
An honorary degree is an academic degree for which a university (or other degree-awarding institution) has waived all of the usual requirements. It is also known by the Latin phrases ''honoris causa'' ("for the sake of the honour") or ''ad hono ...
) by
Sri Venkateswara University
Sri Venkateswara University (commonly referred as S. V. University or SVU) is a public state university located in Tirupati, Andhra Pradesh, India. The university is named after Lord Venkateswara, whose shrine is located in the city.
The univ ...
, India; and Doctor of Civil Law (Honoris Causa) by the
University of Mauritius
The University of Mauritius (UoM) (french: Université de Maurice) is the national university of Mauritius. It is the oldest and largest university in the country in terms of student enrollment and curriculum offered. The public university's main ...
. On 17 July 2008, he was made an Honorary Fellow of the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 millio ...
.
He has been a visiting fellow, London School of Economics, a full-time
UGC Visiting Professor in Department of Business Management, Osmania University; full-time Visiting Faculty, Administrative Staff College of India and continues to be Honorary Professor at
Centre for Economic and Social Studies at Hyderabad. Reddy was also Distinguished Professor of the
Indian Institute of Technology (IIT) Madras.
Positions held
In 1996, Reddy had been appointed deputy governor of RBI. He has also worked with the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
as executive director in 2002. Prior to joining the Indian Administrative Services (IAS), he worked as a
lecturer
Lecturer is an List of academic ranks, academic rank within many universities, though the meaning of the term varies somewhat from country to country. It generally denotes an academic expert who is hired to teach on a full- or part-time basis. T ...
from 1961.
While in the IAS, he held the positions of secretary (banking) in Ministry of Finance and principal secretary in Government of Andhra Pradesh and has worked with the governments of China, Bahrain, Ethiopia and Tanzania.
Reddy was Member of The Commission of Experts of the president of the UN General Assembly on Reforms of International Monetary and Financial System. In addition to the chair, Professor
Joseph Stiglitz
Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the Joh ...
(USA), members of this UN Commission were drawn from Japan, Western Europe, Africa, Latin America, South and East Asia.
Reddy was president of the Indian Econometric Society during 2011. Reddy was on the advisory board of
Institute for New Economic Thinking
The Institute for New Economic Thinking (INET) is a New York City–based nonprofit think tank. It was founded in October 2009 as a result of the 2007–2012 global financial crisis, and runs a variety of affiliated programs at major universitie ...
(INET). The INET advisory board includes Nobel laureates as well as other prominent economists.
Reddy was on International Advisory Board of the Columbia Program on Indian Economic Policies,
Columbia University
Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
, New York. He was a Member of an informal international group of prominent persons on International Monetary Reforms. He was also on Advisory Group of eminent persons to advise the finance minister of India on G-20 issues.
He was the chairman of the
Fourteenth Finance Commission of India since 3 January 2013.
Reddy was appointed the twenty-first governor of the Reserve Bank of India on 6 September 2003 and served in that position for five years.
Contributions
Reddy has worked on piloting a calibrated approach to financial sector reforms.
A 19 December 2008 article in the ''
New York Times
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid d ...
'' has credited the tough lending standards he imposed on the Indian banks as RBI Governor for saving the Indian banking system from the sub-prime and liquidity crisis of 2008.
At the Reserve Bank, he was Member-Secretary of two high level committees chaired by RBI governor
Dr. C. Rangarajan
Chakravarthi Rangarajan (born 1932) is an Indian economist, a former Member of Parliament and 19th Governor of the Reserve Bank of India. He is the former Chairman of the Prime Minister's Economic Advisory Council, he resigned the day the Unite ...
: one on
Balance of payments
In international economics, the balance of payments (also known as balance of international payments and abbreviated BOP or BoP) of a country is the difference between all money flowing into the country in a particular period of time (e.g., a ...
and the other on Public Sector disinvestments.
Reddy was also a member of the Reserve Bank of India's Policy Group on External Debt Statistics. Reddy is credited to have played a crucial role in framing macro-economic policies that helped quarantine the country from the
domino effect
A domino effect or chain reaction is the cumulative effect generated when a particular event triggers a chain of similar events. This term is best known as a mechanical effect and is used as an analogy to a falling row of dominoes. It typically ...
of the financial crisis encountered by the South-East Asian countries during the later part of the 1990s. He, along with
Dr. C. Rangarajan
Chakravarthi Rangarajan (born 1932) is an Indian economist, a former Member of Parliament and 19th Governor of the Reserve Bank of India. He is the former Chairman of the Prime Minister's Economic Advisory Council, he resigned the day the Unite ...
, is also credited with the formulation of the course to be steered by the country to come out of the then Balance of Payments crisis.
In the Indian context, he was the first to use the term '
financial inclusion
Financial inclusion is defined as the availability and equality of opportunities to access financial services. It refers to a process by which individuals and businesses can access appropriate, affordable, and timely financial products and service ...
' in April 2005 in his Annual Policy Statement as Governor of the
Reserve Bank of India
The Reserve Bank of India, chiefly known as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for ...
. Banks were urged in the Annual Policy Statement to review their existing practices to align them with the objective of financial inclusion.
As Governor, he saw his job as making sure Indian banks did not get too caught up in the bubble mentality. He banned the use of bank loans for the purchase of raw land, and sharply curtailed securitisations and derivatives, and essentially prohibited off-balance sheet financing. He increased risk weightings on commercial buildings and shopping mall construction and increased bank reserve requirements.
In one of his interview,
Joseph E. Stiglitz
Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the Joh ...
, Professor of Economics at Columbia University and Nobel Laureate, had said 'If America had a central bank chief like Y.V. Reddy, the US economy would not have been in such a mess.'
Less well-discussed is his work on rural banking, particularly on reviving co-operative banks and his focus on the common person. His term was marked by an emphasis on financial inclusion with the aid of information technology. He is widely consulted on many financial issues by institutions both in India as well as the world over.
Publications
*
*
*
*
*
Reddy authored a book titled "India and The Global Financial Crisis : Managing Money and Finance" in 2009. This book provides insights into the making of public policies across a spectrum of areas between the years 2003 and 2008, a period of rapid growth of the Indian economy. He came out with a sequel "Global Crisis, Recession and Uneven Recovery" which provided a thinker and experienced policymaker's understanding of the genesis, anatomy and impact of the financial crisis, and of the lessons it offered.
Navigating through the debates between 2010 and 2012 on the continuing global financial crisis, his 2013 book "Economic Policies and India's Reform Agenda: New Thinking" reflected the confidence of Reddy who steered the nation's banks to safer waters. "Advice & Dissent" published in 2017 is Reddy's memoir.
Speeches and remarks
23 speeches given by Reddy during his term as RBI governor (2003 to 2008) are in the public domain.
Other speeches are also in the public domain, for example:
*
*
*
*
Reddy's presidential address on "A Tale of Two Commissions and Missing Links" at the 97th Annual Conference of the Indian Economic Association (IEA) in Udaipur on 27 December 2014, dwelt at length on the origin, evolution, linkages, achievements, limitations and the debates relating to the two major commissions on economic affairs in India. He also cited the success of the Chinese model where the concept of 'plan' had been replaced by 'guideline' in the country's 11th Five Year programme. He noted "The change led to China's transition from a Soviet-style planned economy to a socialist market economy and gained greater responsibility and power in overseeing China's economic development".
Reddy was invited to deliver the prestigious The
Per Jacobsson
Per Jacobsson (5 February 1894 – 5 May 1963) was a Swedish economist who served as the managing director of the International Monetary Fund (IMF) from 1956 until his death in 1963.
Born in Tanum, Bohuslän, Jacobsson received degrees in law ...
Foundation Lecture in June 2012 at the
Bank for International Settlements
The Bank for International Settlements (BIS) is an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks".
The BIS carries out its work thr ...
in Switzerland. In this lecture on 'Society, Economic Policies and the Financial Sector', the main message he gave was that society has put its trust in central banks and as such it expects central bank to ensure trust and confidence in money and finance and serve the interest of the masses.
In popular culture
Timothy Geithner
Timothy Franz Geithner (; born August 18, 1961) is a former American central banker who served as the 75th United States Secretary of the Treasury under President Barack Obama from 2009 to 2013. He was the President of the Federal Reserve Bank o ...
, former
US Secretary of the Treasury
The United States secretary of the treasury is the head of the United States Department of the Treasury, and is the chief financial officer of the federal government of the United States. The secretary of the treasury serves as the principal a ...
and president of
Federal Reserve Bank of New York
The Federal Reserve Bank of New York is one of the 12 Federal Reserve Banks of the United States. It is responsible for the Second District of the Federal Reserve System, which encompasses the State of New York, the 12 northern counties of New ...
, in his book
''Stress Test: Reflections on Financial Crises'', published in May 2014, wrote about his brief encounter with India's former Central Bank Governor Y.V. Reddy who gave him a copy of "Complications: Notes from the Life of a Young Surgeon" by
Atul Gawande
Atul Atmaram Gawande (born November 5, 1965) is an American surgeon, writer, and public health researcher. He practices general and endocrine surgery at Brigham and Women's Hospital in Boston, Massachusetts. He is a professor in the Departmen ...
.
eddy
Eddie or Eddy may refer to:
Science and technology
*Eddy (fluid dynamics), the swirling of a fluid and the reverse current created when the fluid flows past an obstacle
*Eddie (text editor), a text editor originally for BeOS and now ported to Linu ...
told me it was the best book I would ever read about central banking, and the parallels with financial crisis management really are striking. It's about making life-or-death decisions in a fog of uncertainty, dealing with the constant risk of catastrophic failure.
Later while talking with
Martin Wolf
Martin Harry Wolf (born 16 August 1946 in London) is a British journalist of Austrian-Dutch descent who focuses on economics. He is the associate editor and chief economics commentator at the ''Financial Times''.
Early life
Wolf was born in ...
during his lunch with the Financial Times, Geithner mentions "It was a fascinating book, in part because he
awandedescribed how in that profession they do things that in economics we don’t that well. They have these things they call morbidity and mortality reviews every Friday, where they go over mistakes." This story received mention in several book reviews. In a book review, Sam McNerney notes Reddy's recommendation is surprising but sensible. Gawande, a surgeon by trade, has knack for elucidating the inefficiencies of modern medicine and contrasting hospital management with business management.
In another review of this book, Eric Warters write "To be clear, this book has absolutely nothing to do with central banking, at least not on the surface of it. This book is Dr. Gawande's retellings of myriad medical emergencies he encountered as a surgeon and how he managed the stress, uncertainty, and challenges that they brought on. For Geithner, the parallels were striking, as both men had to act quickly with limited information, sometimes on a hunch, with dire consequences at stake."
Controversies
Reddy often courted controversy for deliberately guiding the Indian Rupee lower through verbal intervention. Some of his media talks were perceived as ill-timed.
In December 2003, Reddy was dragged into a controversy, when someone impersonating him called the then regional director of
RBI Bhopal,
Uma Subramaniam and asked her to lend for a personal emergency. Subramaniam was able to collect only INR 9,00,000 by various means which included coercing her staff members. She then handed over the money to an accomplice of the impostor. She did not get back to Reddy regarding this incident. The sensational fraud rocked and embarrassed the RBI, and infuriated Reddy, who insisted on a full inquiry.
References
External links
*
India's Financial Secret WeaponReserve Bank of India
{{DEFAULTSORT:Reddy, Y. V.
20th-century Indian economists
1941 births
Living people
University of Madras alumni
Osmania University alumni
Governors of the Reserve Bank of India
Recipients of the Padma Vibhushan in public affairs
People from Kadapa
Honorary Fellows of the London School of Economics
Indian Administrative Service officers
Institute for New Economic Thinking
Reserve Bank of India
Telugu people