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Governor: The Silent Saviour (2026)
Director: Chinmay D. Mandlekar
In the 21st century, India seems to be on a roll. With a young, qualified, internet-savvy population proficient in the world’s lingua franca, the world is its oyster. Its economy, by GDP, ranks sixth after the US, China, Germany, Japan, and the UK.
Its position in 1991, however, was quite dismal: India ranked between 15th and 17th place and accounted for less than 1% of global GDP.
Independent India started life as one of the poorest countries in the world, a far cry from its pre-imperial era, when India and China accounted for two-thirds of the world’s GDP. Nehruvian Fabian economic policies were socialist in nature, and the government of the day had tight control over how money was spent.
In the 1980s, however, under the leadership of Rajiv Gandhi, India increased government spending. External borrowing also became significantly heavy. A growing debt burden and rising inflation were noticed. Tax revenue collection was also dismal. By 1990–91, following the US invasion of Kuwait, oil prices had risen. The import bill increased, and foreign confidence declined. India had very low reserves. By June 1991, it had sufficient reserves to pay for only three weeks of imports. Political instability following the fall of Rajiv Gandhi’s government and the subsequent short-lived rules of V. P. Singh (1989–90) and Chandra Shekhar (1990–91) did not help the situation. Leaders had to focus on their own survival rather than lay out concrete steps to strengthen the economy.
S. Venkitaramanan was appointed Governor of the Reserve Bank of India by the Chandra Shekhar government. Under the Narasimha Rao government, with policies introduced by Finance Minister Manmohan Singh and the RBI Governor, an emergency contingency plan was implemented to address India’s balance-of-payments crisis.
Manmohan Singh oversaw broader fiscal and structural reforms, while the Governor handled monetary, foreign-exchange, and banking matters. It is said that Venkitaramanan, while serving as Finance Secretary (1985–89) under the Rajiv Gandhi government, had alerted the government to the impending danger.
The IMF forwarded a loan while India strategised on measures to improve its finances. The IMF also helped to improve international credibility. The RBI mobilised gold from the country, including 20 tonnes confiscated from smugglers, as collateral to secure loans from the banks of Japan, England, and Switzerland. The gold was India’s last resort to secure the loan and had to be transferred physically and discreetly to convince creditors that India had the reserves. It worked. By November 1991, the RBI had repaid the loan.
P.S. A memorable quote from the movie: “Beyond truth and lies lies responsibility.”
Farouk Gulsara (asokansham@gmail.com) is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
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