Mangaluru: Manel Srinivas Nayak Memorial Besant Institute of Postgraduate Studies held the inauguration of their new state-of-the-art building for the institute at the campus premises in Bondel here, on October 20.
Dr Y V Reddy, former Governor of Reserve Bank of India and Chairman of 14th Finance Commission, inaugurated the facilities by planting a sapling and unveiling the plaque.
The formal programme began with an invocation by Ananth Bhat. Vinay Krishna gave the security statement. Prof Rashmi welcomed the gathering and introduced the chief guests, former Governor of RBI Dr Y V Reddy, President of Besant Women’s College Kudpi Jagadish Shenoy (CMD, Hotel Tajmahal Pvt Ltd), Vice President Manel Annappa Nayak (Industrialist and Educationist),.
Addressing the gathering, Dr Y V Reddy told the students how fortunate they were to be part of an institution that is not only old but has values and is continuing to show good performance.
Enlightening the gathering on the issue of black money, he said that the distinction between black and white money is not as black and white as it appears to be. “Not all black money is abroad, it is there here in the country too. It is does not exist just as a stock. It is a stock and flow. It is not easy to distinguish between black and white money. Today’s black money could become white tomorrow. For a labourer who spends the whole day doing some work, the money that he receives at the end of the day is white for him, even though it may be black. He then takes this to a shop to get the items necessary for his daily survival. This money that the shop keeper receives is also white. Now if a mafia comes and threatens the shop keeper, and the shop keeper gives him money, this money becomes black.” He also jested that this was just the theory according to him since he did not have the practical experience.
Commenting on the GST bill and financial inclusion, he said that the bill gives an incentive to accountability, but interestingly real estate has not been included, and also said that it was one of the main instruments by which black money can be curbed. He also said that financial inclusion does not mean just opening an account. “Financial inclusion is meant to bring economic development by itself. It can achieve only upto a point. If you are so poor that you do not have access to cash, then what is the point in having access to a bank?”
There was an interactive session wherein individuals varying from those from the banking sector to teachers asked interesting questions to Dr Reddy.
Answering to a question on if there are techniques to decide the ideal rate of exchange and how the RBI comes to know if a currency is over-valued or under-valued, he said that there is no correct exchange rate. “You cannot know the correct exchange rate, but you get a sense of which exchange rate may or may not be right. The exchange rate should not be out of alignment with what is necessary for balance and it should not be volatile.”
Expressing his views on Quantitative Easing (QE), he said that during the global financial crisis, there was a sudden loss of confidence. There was no economic activity and there were some assets which were being sold very cheaply because of this distress. At that time, the central bank said that they would pump money. When this is done, there are two ways to handle policy, one being interest rate and the other is money. Some countries like USA and the countries in Euro-zone which were severely affected did QE. With so much money, the interest rates become so low that the people acting on it. But when the money was pumped in, they expected that people will spend more, companies will invest more and economic activity will improve; that did not happen except for some extent in the USA. When that happened, all this money went into finance industries, people started buying from each other and the prices went on. That was one problem but the QE had served its purpose.
Now with excess money floating, the money that was pumped in has to be withdrawn and this would bring down interest rates. “When the crisis began, everybody all over the world wanted to solve the problem and to that end, they started pumping money into the global economy. Once the question of withdrawing comes, somebody will feel the pain. They are not willing to bear that pain. When QE was done, they did not think of an exit strategy. For the world, the global currency is the US Dollar and the supply of dollar is decided by the US Federal Reserve, an institution created to supply dollars as required by the USA and to serve the interests of America. The rest of the world has to bear with what they have done. If the central bank which provides the currency for the whole world is doing QE, the rest of the countries will be affected differently and all the integrated global financial markets are suddenly going to find themselves in a problem,” he added.
Also answering to a question about the RBI becoming ineffective in public policy with the increasing black money in the market, he replied that because of black money, the revenue accruing to the government is going down but it depends on the relationship between the black money and the white. “Also don’t consider black money as corruption; there can be corruption with white money also. We have to remember why black money came in the first place. It was due to the public policy. If the public policy itself was good, then there would have been no way for black money to come. The solution to this problem of black money lies in public policy to some extent and ethics of the corporates. Ultimately, black money cannot be generated unless there is somebody who gives and somebody who takes it.”
Secretary Shyam Sundar, Leeladhar (former Deputy Governor, Reserve Bank of India), C D Kamath (former Chairman, Tata Refractories Ltd), eminent bankers, MSNM Besant Institute faculty, staff and students were present on the occasion.
About MSNM Besant Institute:
Manel Srinivas Nayak Memorial Besant Institute of Postgraduate Studies, popularly known as MSNM Besant Institute was established in 1999 by Women’s National Education Society, Mangaluru, the sponsors of the renowned Besant Educational Institutions. The MSNM Besant Institute was set up on a separate campus in the outskirts of Mangalore in Bondel, as a tribute to the memory of the most dynamic president in the history of WNES, late Manel Srinivas Nayak. The institute is regarded as a pioneer in management education in Mangalore and has been marching towards excellence. The institute endeavors to maintain a high standard in its academic delivery, fostering managerial skills and development of right attitude to life and business among the students. This has resulted in 100% result with record number of distinctions and ranks in the past five years coupled with large number of successful placements in leading companies.