Chest thumping will come back to haunt us

• Any monetary economist would say don't do it (demonetisation) until you have all the money printed.
• If you take poll of monetary economists, they would tell you that on the day you actually do it, you should be prepared to replace as much currency as needed for transactions. Otherwise it will cause a reduction of economic activity.
• Monetary economists would say, be ready to replace on day one everything that was used for transactions. A significant fraction of that, not all 86%, but enough so that anybody who wanted money will be able to take it out from ATMs.
• There are channels through which government can by pass RBI legally (like 1978 demonetisation ordinance).
• Ultimately if Governor disagrees - Dr. YV Reddy had a interesting response to what he would have done! - He said he would have gone to the hospital and then resigned on health grounds. Now some people can't go to the hospital they look the picture of health.
• All bank accounts could be linked to Aadhaar, keeping in mind the privacy issues. There are privacy issues and there are issues of tax collection. So long as you make sure that every revenue officer cannot start fishing in that database and lot of it is automated and you can only go into it when those suspicious transactions are flagged and ordinary citizen's privacy is protected. That is the way to reduce the flow.
• We have to recognise that we are dealing with the government employees as they are, not how we wish they would be. The reality is that there is some corruption in the government also. To give license to some areas of government (like tax officers) without checks and balances could enhance corruption.
• If you look at digitisation, we saw a blip up and then looked down after the stress period was over.
• India was growing at about 7.5 to 8 per cent at the point of demonetisation. We have come down substantially and some of this has been because of demonetisation. The world economy is going stronger than at this time last year and in that sense we should be going up with the tide and should have moved up with the growth. In fact, it has moved down. There are three factors: one is the stress in the banking system and the bad loan situation, the second is the demonetisation shock and the third is the anticipation of the goods and services tax (GST). At this point, our growth is not anything to write home about. Hopefully, these are temporary factors, but certainly we have to make sure that our business people feel more confident that there are no more surprises.
• I don’t think the RBI has been undermined, because ultimately this decision belongs to the government. 
• There has always been a tension between the finance ministry and the RBI. The finance ministry likes to believe that the RBI is one of its organs, and the RBI correctly believes that it is a Central bank and not just another regulator who is at the beck and call of the ministry’s bureaucrats. The tension about this is partly because the position of the RBI governor hasn’t been clearly established within the system. On the one hand, you have chief ministers saying ‘sir’ to you, and on the other, you have secretaries claiming that they have authority over you.
• Constant bickering is not particularly good. It takes away from you the time you have to devote to more important things.
• I was trying to say, ‘Let’s not be complacent’. We have problems; our real problems start when we thump ourselves on the chest and say how well we are doing and then don’t pay attention to the fact that there is so much more to be done. These things, like the thumping of the chest, will come back to haunt you. Let others praise you, let others give you kudos. But don’t keep boasting, because the media will take it up for a little while, but investors remember. My point was—here’s some good stuff but we have to be careful that we are not complacent. And it was taken here as me being derisive; that was clearly not the intent. We have to be much less boastful and much more focused on the work that needs to be done.
• Our future, that this is the India you want to build, not an intolerant India.
• As a public servant, you also have a public responsibility. 
• You can’t stay in the job if you have serious differences with the government. 
• When there is an environment in the public that has not been created by the government—but it emerges—then you have a duty to say that this is not the way we should go as a country.
• There was a discussion of the Enforcement Directorate looking at over-invoicing, which was rampant. Why didn’t we go after that? That was very easy to catch.
• There was no obligation on the government’s part to extend my tenure, and similarly, there was no obligation on my part to stay on. The University of Chicago was not the constraint.

Chest thumping will come back to haunt us ... Raghuram Rajan