R100

VOLUME XLIV NUMBER 9 September 2020

China’s Predicament Ravi Bhoothalingam Seeking Answers to China’s Belligerence in the South China Seas Manoj Kewalramani A Global Humanitarian Crisis Through the Eyes of a Child Baladas Ghoshal Tamil Political Culture Since 1985 Neera Chandhoke

Two Decades of Environmental Politics in Delhi Susan Visvanathan Central Bank and the Government: Providing Primacy to an Important Debate TCA Ranganathan A Behavioural Study of the Iconic Asiatic Elephant Divyabhanusinh Two Classics in Translation Arshia Sattar The Power of Song Rohini Mokashi-Punekar A Debut Novel: Between Two Eras Devangshu Datta C o n t e n t s

Ravi Bhoothalingam China’s Transformation: The Success Story and the Success Trap by Manoranjan Mohanty 04

Manoj Kewalramani Nine Dash Line: Deciphering the South China Sea Conundrum by Pooja Bhatt with Introduction by Air Marshall KK Nohwar PVSM VM (Retd.) 05

Baladas Ghoshal First, They Erased Our Name: A Rohingya Speaks by Habiburahman with Editors Sophie Ansel 07 Chandra Chari Uma Iyengar Ali Ahmed The Indian Army: Reminiscences, Reforms & Romance by Lt.Gen. H.S. Panag 08 Consultant Editor Adnan Farooqui Manisha Sobhrajani Love, Loss, and Longing in Kashmir by Sahba Husain 09

Editorial Advisory Board Neera Chandhoke The Strangeness of Tamil Nadu: Contemporary History and Political Culture in Romila Thapar South by M.S.S. Pandian. Edited by David Ludden and Anandhi S. 11 Ritu Menon Chitra Narayanan Mohan Rao Politics of Precarity: Gendered Subjects and the Health Care Industry in T.C.A. Srinivasa Raghavan Contemporary Kolkata by Panchali Ray 13 Mini Krishnan Susan Visvanathan Uncivil City: Ecology, Equity and the Commons in Delhi by Amita Baviskar 14

Subscription Rates Hem Borker Scholars of Faith: South Asian Muslim Women and the Embodiment of Religious Single Issue: R100 Knowledge by Usha Sanyal 15 Annual Subscription (12 Issues) Individual: R1500 / $75 / £50 TCA Ranganathan Quest for Restoring Financial Stability in India by Viral V. 17 Institutional: R2500 / $100 / £60 Zinnia Ray Chaudhuri From Oberoi to OYO: Behind the Scenes with the Movers and Shakers of India’s (inclusive of bank charges and postage) Hotel Industry by Chitra Narayanan 19 Life Donors: R10,000 and above Deeksha Bharadwaj History and Theory of Knowledge Production: An Introductory Outline by Rajan Gurukkal 20 Advertisement Manager Nikhil Kumar Delhi in Historical Perspectives by K. A. Nizami translated from the [email protected] original Urdu by Ather Farouqui 21

Website MANAGEMENT Sudhirendar Sharma Dara Shukoh: The Man Who Would Be King by Avik Chanda 23 Digital Empowerment Foundation [email protected] Govindan Nair Ganga: An Endless Journey by Chanchal Kumar Ghosh; Superhuman River: Stories of the Ganga by Bidisha Banerjee 24

Computer inputs, Divyabhanusinh The Secret Life of Elephants by Ritesh Joshi. Foreword by Raman Sukumar 25 design and layout Satish Kumar Amitabha Bhattacharya Administering Colonialism and War: The Political Life of Sir Andrew Clow of Digital Empowerment Foundation the Indian Civil Service by Colin R. Alexander 26

Please Address All Mail To: Santanu Das Her Day 27 The Book Review Literary Trust Arshia Sattar The Mahabharata of Kavi Sanjay translated from the Bengali by Pradip 239, Vasant Enclave 110 057 Bhattacharya; Chanakya Niti: Verses on Life and Living translated from the original Sanskrit by A.N.D. Haksar 29 Telephone: 91-11-41034635 Sumallya Mukhopadhyay Estuary by Perumal Murugan translated from the original Tamil by 9278089024 / 9811702695 Nandini Krishnan 30

Website: Rohini Mokashi-Punekar The Ant Who Swallowed the Sun: The Abhangs of the Marathi Women Saints www.thebookreviewindia.org translated from the original Marathi by Neela Bhagwat and Jerry Pinto 31 Syed Aalim Akhtar Relapse: A Novel by Srikant Verma translated from the original Hindi by email: Krishna Baldev Vaid 33 [email protected] [email protected] Semeen Ali The Engaged Observer: The Selected Writings of Shanta Gokhale edited with an Introduction by Jerry Pinto 34 Advisory Board Founder Members K.R. Narayanan Devangshu Datta Checkmate by Nihshanka Debroy 35 S. Gopal Nikhil Chakravartty Divya Shankar The Alchemy of Secrets by Priya Balasubramanian 36 Meenakshi Mukherjee Nihshanka Debroy Mind Master: Winning Lessons from a Champion’s Life by Viswanathan Anand K.N. Raj with Susan Ninan 37

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Central Bank and The central argument can be summarized in the author’s own words: ‘Financial the Government: stability is perhaps the most important pre- requisite for stable growth. It is surprisingly Providing Primacy also the most compromised one. Post-1991 to an Important reforms, India undertook an upward and onward march in economic progress for Debate close to two decades. Since then, the lack of financial stability has emerged as its Achilles’ TCA Ranganathan heel. My objective in putting together the book has been that it stirs up this important QUEST FOR RESTORING FINANCIAL STABILITY IN debate, gives it the primacy it deserves and INDIA provides some useful inputs, so together By Viral V. Acharya we can implement the much needed long- Sage Publications, New Delhi, 2020, pp. 396, lasting solutions to restore financial stability `695.00 in India.’ In his preface, Acharya argues that his book intrigues. It comes heavily decision making in all matters of state policy relating to banking regulation, recommended. It was released, in C.V. Starr Professor of Economics in debt management, timely disclosures of a high-powered function graced by the Department of Finance at New York T defaults, market regulation, capital flow two former RBI Governors (YV Reddy and University Stern School of Business. measures and RBI profit transfer have been Duvvuri Subbarao) as speakers and a galaxy He had completed the Bachelor of of present and former RBI officials, Deputy Technology Degree in Computer Science dictated and governed principally by the Governors and so on. The book carries a and Engineering from Indian Institute of concern regarding their fiscal implications blurb by Mervyn King (former Governor, Technology, Mumbai in 1995 and Ph.D. and naught else. The book does admit that Bank of England) apart from endorsements in Finance from NYU-Stern in 2001. His progressive steps limiting fiscal dominance by Raghuram Rajan, C Rangarajan (both primary research interest is in theoretical were undertaken in the post-liberalization former RBI Governors in addition to being and empirical analysis of systemic risk of the period. In those initial years, high economic holders of other prestigious positions) financial sector, its regulation and its genesis growth, and a rise in household financial and several other financial sector doyens. in government-induced distortions; an savings had facilitated an environment of In terms of contents, at one level, it is a inquiry that cuts across several other strands consolidating government debt and fiscal collection of seventeen speeches/reports of research—credit risk and liquidity risk, deficit trajectories. But the author laments targeting a variety of audiences, ranging from their interactions and agency—theoretic that fiscal dominance has once again the FICCI’s Ladies Organisation, Mumbai foundations, as well as their general taken hold of the Indian economy as these chapter, to high level RBI/IBA conferences/ equilibrium consequences. He has authored/ conducive factors have gradually reversed. summarizing Monetary Policy Committee co-authored several books earlier, on an array Concerns voiced by him, illustratively are: deliberations. They are thus of various of Wall Street/US Financial governance *Bank recapitalization and regulation: lengths and complexity ranging from ‘light related issues. He additionally has several There is pressure from the government for and frothy’ to being intensely academic with publications and prize-winning works in regulatory forbearance, not only for public pages of equations and derived tables and many eminent journals. He was Deputy sector banks but also for private sector banks, graphs. Governor at the Reserve Bank of India (RBI) as the prudential norms are ownership Why would a book consisting mainly of from 23rd January 2017 to 23rd July 2019, neutral. This is because imposing prudential public speeches arouse so much interest? In in charge of Monetary Policy, Financial regulatory norms required for financial a feisty and eminently readable foreword, Markets, Financial Stability, and Research. stability could lead to a huge need for the Dr Reddy brings out that the practice of The speeches/essays are grouped by government to capitalize the public sector Deputy Governors making public speeches the author under six themes: Bank Non banks and thereby stress the fiscal deficit. goes back to the days of Dr Rangarajan who Performing Assets, Need for Public Credit *Timely disclosure of defaults: There was was the first Deputy Governor to deliver well Registries, Financial Cycles, Monetary resistance to RBI tightening default disclosure prepared speeches containing elements and Policy transmission, Developing Viable directives on one-day bank loan defaults to communications we normally attribute to Capital Markets and External Resilience, markets, presumably because downward Central Bankers to create public opinion. He Enhancing the autonomy of the Central rating migrations would imply larger brings out that the most influential was the Bank, Markets, and the Real Economy. As provisions and more demands on the budget Kutty Memorial Lecture which had made with all RBI speeches they are extremely well for recapitalization and thus fiscal stress. out a case for ending the system of automatic documented, and data-linked and are thus * Rate setting: Interest rate cuts are monetization. The impact was such that valuable aids to any researcher exploring any sought by the government not for Monetary it led to a memorandum of understanding of these themes. They are tied together by a Policy needs but because they result in between the Government and the RBI, well detailed preface entitled ‘Fiscal Dominance: treasury gains for banks resulting in a before it was incorporated as a law. The A Theory of Everything in India’ wherein lowered demand for Capital apart from a practice of Deputy Governors delivering the author sketches out how and why a lowered cost of rolling over government prepared speeches was continued by SS directional coherence exists in speeches, debt. Likewise, rate hikes are resisted as Tarapore and all subsequent successors. which were seemingly superficially crafted to this would imply larger provisions for fixed The author, Viral V Acharya is the suit different audience categories. income securities and a consequential impact The Book Review / September 2020 17

Why would a book consisting the highest hill; it should remain untouched Quality Reviews etc., very little analytically and unperturbed in the midst of almost mainly of public speeches relevant information about the sectoral any macroeconomic storm.’ It is argued and geographical structure of these NPAs arouse so much interest? that erosion of the RBI capital through has ever been put into the public domain high dividend pay-outs leads to increasing In a feisty and eminently thereby resulting in a vague understanding compromise of the severity of stress scenarios about causes and suggested remedies. Such readable foreword, Dr Reddy it can withstand in future, especially when a discussion would not have violated any the sovereign rating is not of the highest brings out that the practice banking secrecy commitment. A scholarly quality. book like this, concerned about NPA of Deputy Governors making The solutions offered are based on the problems, could have filled the gap. Then author’s firm conviction that the Central public speeches goes back to again, while references to the importance Bank must at all times ensure that financial of adhering to Global Best Practices are the days of Dr Rangarajan stability is not compromised, especially in scattered across the book, the specifics are the face of imminent government pressures who was the first Deputy missing. Illustratively, the specifics of Global driven by a shorter time horizon. As a Best Practices for financing PPP projects or Governor to deliver well banking regulator, the Central Bank has Bank Loan concentration norms or Loan to ensure the safety of bank deposits; and prepared speeches containing loss provisioning methodology have not been as a monetary authority, price stability brought into the debate diluting the quality elements and communications and managing the currency’s excessive of contribution. It will freely be accepted volatility are part of its long-term mandate. we normally attribute to that the current Covid related lockdown The solutions offered are many, and will continue to add to the NPA problem Central Bankers to create policymakers would do well to have a closer of banks, thus renewing the debate about look at the fairly long list provided in the public opinion. regulatory forbearance and restructuring of various chapters of the book. These range bank loans to Covid impacted businesses. At from principles for the RBI’s governance the same time, most observers also recognize on capital. The book goes on to say, ‘In and appointments, upholding Basel capital that it is extremely important that credit fact, once sufficiently fiscally dominated, and liquidity norms in letter and spirit, support be provided for resuming operations the liquidity policy can control most of forbearances (if at all) to be subject to a and economic activity. It is when the the government bond yield curve and ‘sunset clause’ of no longer than six months, contradictions between NPA management prices, rendering the rate-setting process a strong PCA framework, timely default and Restart management come into play of monetary policy authority effectively disclosure for even one-day, setting up of a and opinions start to diverge that specific irrelevant.’ public credit registry, annual asset quality consciousness of Global Best Practices assist *Market regulation: Asymmetric review for banks and NBFCs, resolution thought. mark-to-market accounting treatment of of large NPAs, etc. This conviction is well The debate on the RBI’s Balance sheet government bonds: Treasury gains are placed and deservedly receives sympathetic and net worth and dividend payment transferred for the most part as soon as bond resonance elsewhere if the post launch book obligations also intrigues. To an outsider, prices rally; in striking contrast, treasury related events and expert-speak is any guide. the quality of the Sovereign rating and extent losses are allowed to be recognized over While the author’s commitment and of Foreign Currency reserves would matter several quarters. The end result is another passion come through this entire erudite more than a Central Bank’s net worth in a form of deep interference of fiscal deficit intellectual discourse, discussions on the stress scenario. After all, in a currency crisis, pressures on the accounting treatment of behavioural mores of the RBI and the state currency depreciation can well create capital banking balance sheets. ‘Public sector banks cannot be viewed in isolation. The famous gains to a Central Bank unless they try to and other government-owned entities in the Hungarian philosopher, Arthur Koestler in defend the indefensible, while domestic financial sector can be, and are, required— his book The Ghost in the Machine (1967) crises would only require decisions regarding through moral suasion—to buy up entire had taken recourse to a Greek word, Holon, NPA recognition with the resultant fund issue amounts in individual auctions at to define organizations or hierarchies which related heavy lifting being thereafter done above-market prices.’ are simultaneously both a ‘whole’ and by the banks or the Sovereign. Readers *Capital-flow measures: It is indicated a ‘part’. Holons exist simultaneously as would therefore have benefited if Global that continuous fiscal deficits have resulted self-contained wholes in relation to their Best Practices regarding relationship between in increased reliance on external finance subordinate parts, and as dependent parts Central Bank net worth and balance sheet creating a continuous pressure to relax when considered from the inverse direction. size had been brought into play in support of controls over capital inflows to meet While originally, this was in relation to the debate with possible illustrations of how the shorter-term objective of financing biological systems and hierarchies, it has exactly this net worth comes handy. government borrowing, and this can go since been found to be a useful practical Then again, while the author has well counter to financial stability. device to assess functioning of hierarchies in discussed how increased dependence on *RBI balance sheet: The demands made social and/or economic systems. A debate external finance and consequent relaxations on the Central Bank to transfer what are regarding Central Banking functioning/ in controls over capital inflows can go considered excess reserves in its balance sheet independence falls in this category. counter to financial stability, a discussion to the government are driven by the fiscal Viewed from this perspective of the on why the regulator did not or could not imperative. ‘Given India’s external sector RBI communicating as a regulator, a take counter moves to relax controls in the vulnerabilities, it is paramount that the noteworthy aspect about the NPA issues outward direction would have improved Central Bank balance sheet be perched on is that despite extensive references to Asset understanding. A relatively simple counter 18 The Book Review / September 2020 balancing could have been to allow resident Changing Profiles Indians access to multi-currency banking facilities from their local banks within the existing LERMs (Liberalised Exchange Rate Zinnia Ray Chaudhuri Management) entitlements. Such facilities FROM OBEROI TO OYO: BEHIND THE SCENES WITH are quite common in most parts of the globe. THE MOVERS AND SHAKERS OF INDIA’S HOTEL Also, while it is entirely plausible that INDUSTRY interest rate setting decisions can impact By Chitra Narayanan bank profitability, the dilemma of a fiscally Penguin Random House, India, 2020, pp. 319, strapped government relying on inward `399.00 capital flows to balance budgets should have merited a somewhat more detailed ost of us still peruse a list of hotels discussion. Interest rate cuts do boost bank that pop up on various aggregators profits, but also reduce India’s attractiveness like we do a menu at an expensive (by way of reduced earnings) to a foreign M restaurant—with one eye on the prices on investor thereby impacting inward flow the right. We are usually looking for a hotel volume. On the other hand, interest rate or a homestay within our budget which will hikes though damaging bank balance sheets, meet our basic requirements of, as Chitra ought theoretically to improve investor Narayanan puts it, the four Bs—bed, bath, returns and thereby attracting higher capital breakfast and broadband. flows. Readers would thus have benefitted Narayanan, a Delhi-based journalist, has if a more detailed discussion had been The Savoy in 1911 inspired Agatha Christie spent years observing the hotel industry. provided. to write her very first novel—The Mysterious While the average traveller looks at a hotel Having said this, there is no doubt that Affair at Styles. through the twin lens of basic amenities the book has brought some of the core issues Narayanan, though, after dedicating a and budget, Narayanan looks at the pricing involved in the relationship between the detailed chapter to the industry’s ‘History methods, consumer behaviour, history of the Central Bank and the government into sharp and Evolution’, moves on quickly to the late brand and the innovations and technology 90s and the noughties when the industry focus. While one may have a difference of being employed to attract customers. In opinion on some of the arguments relating started seeing big changes. There is obviously her book, From Oberoi to OYO: Behind much space given to the holy triumvirate to debt management or market regulation, the Scenes with the Movers and Shakers of the Taj, the ITC and the Oberoi—the etc. or on the completeness of the discussion, of India’s Hotel Industry, Narayanan not the book does represent a valuable addition only charts the history of hospitality in three players who for long dominated the to the extant literature. It is also extremely India, but also its evolution, while making hospitality scene and have maintained readable and is therefore, a must read for educated predictions about its future (which, a strong presence despite the entry of students of finance and banking, academics, unfortunately, Covid has now rendered numerous other names. market participants, policymakers and the precarious). An especially significant chapter in informed citizen. The story of hotels and hotel chains Narayanan’s insightful book focuses on in India is not purely one of business; hotel chains run by women. ‘Just stay at two TCA Ranganathan, former CMD of Export Import there is sentimentality involved. There is Indian chains that are owned by women, Bank of India and former Non Executive Chairman and you can immediately perceive how of Indian Overseas Bank, is the co-author of All the nostalgia for the colonial aesthetic and, Wrong Turns: Perspectives on the Indian Economy more importantly, the service and treatment they stand out. More so, if you’re a woman (Westland, 2019). one got during the British Raj era—servers guest,’ she writes. She is referring to The in crisp white and smart turbans ensuring Lalit and The Park chains. Jyotsana Suri that the tea is poured just so in a tea room of Bharat Hotels which runs the Lalit, and Book News Book News where no entry is allowed to those who Priya Paul of The Park are trendsetters and dare to show up in open-toed sandals. ‘One success stories within the industry. Between Overdraft: Saving the Indian Saver by Urjit often visits hotels just to recall the good the two, they have demonstrated the myriad Patel, a former Governor of the Reserve old days and get charmed by the legends ways in which a hotel chain can be imbued Bank of India, explains how after centuries and stories, provided the hotels are smart with an inclusive and non-stuffy personality. of ruinous experiences, some governments enough to play them up,’ writes Narayanan. Suri and Paul have also served as inspiration learnt, others haven’t, to control themselves, She gives the example of hotels like The to many women to enter the business in create self-governing Central banks and let Imperial in Delhi, The Savoy in Mussoorie leadership roles. them manage money and regulate banks. and the Great Eastern in Kolkata—each The book meanders through the various The problem of unsustainable bad debts patronized by some of history’s greatest trends the industry has witnessed—the (non-performing assets or NPAs) in the political and cultural figures. The graceful entry of foreign players (which has not Indian banking sector landed on the table Imperial is where Jawaharlal Nehru, been without its own set of dramas); the of the author who, based on thirty years of , Muhammad Ali Jinnah introduction of heritage hotels for a touch macroeconomic experience, worked out the and Lord Mountbatten met to discuss the of royal treatment; the creation of the mid- ‘9R’ strategy which would save our savings, Partition; The Great Eastern served as a market hotel targeted at the middle class, rescue our banks and protect them from muse to celebrated Bengali author Sankar who would otherwise prefer to stay at a unscrupulous racketeers. for his book Chowringhee; and a mysterious, relative’s home in a different city rather than Harper India, 2020, pp. 248, `599.00 unsolved murder of an English woman at spend a week’s salary on a room at the Taj; The Book Review / September 2020 19 Posting Date: 10th & 11th of every month at N.D PSO Postal Registration No DL-SW-01/4079/2018-20 Publishing Date: 8th of every month R.N.I.No. 28686/76 ISSN: No. 0970-4175

Total No. of Pages 40