Delivering the second Business Standard Annual Lecture, Reserve Bank of India Governor Duvvuri Subarao chose the rather curious, if highly important, topic of central bank communication. In an entertaining lecture illustrated with examples, anecdotes and interspersed with good humour, Dr Subbarao drew attention to the increasing sophistication of RBI communication. Market participants, analysts, economists and journalists who have been reading RBI statements and hearing the speeches of RBI governors and deputy governors have for some time noticed the fact of such growing sophistication in communication. While governors Rangarajan and Bimal Jalan were also familiar with the importance of subtle communication, the governor who perfected this to an art form was Venugopal Reddy, who derived immense pleasure from drawing attention to his subtleties, in case the media had not noticed it! Governor Subbarao has followed the fine tradition of his illustrious predecessors.
What is, however, interesting is how closely the subtlety of central bank communication is linked to the language of that communication — namely, the English language. English lends itself to subtlety. Though the fact that many words in the English language have multiple meanings does create problems and reduces the effectiveness of communication, intelligent use of the language can play a role in increasing the efficiency of communication and, thereby, of markets and economic activity.
Governor Subbarao had three examples of the importance of words. To say “close to” as opposed to “closer to”, he pointed out, makes a lot of difference to how markets evaluate policy. The distinction between ‘close’ and ‘closer’ can be easily made in most Indian languages. But when it comes to terms like ‘neutral’, ‘pause’ and ‘bias’ the equivalent Hindi words, for example, are less subtle than their English counterparts. Can English be regarded as the language of the markets, and therefore, can the issue of finding comparable terms in Indian languages be ignored? The jury on this question would be out.
The rising circulation and readership of the Hindi Business Standard, and the already high circulation of Gujarati language business newspapers show that the market for Indian language business and financial news is growing. How would Indian language media capture and convey the subtlety of central bank communication? Clearly, the central bank would need to employ the talent of language experts to be able to translate its English language communication into Indian languages. But, it is not merely a question of translation and language. There is the entire issue of the cultural context and the sociology of communication. A large part of the subtlety of communication derives from the accepted and understood play in the English language. When the RBI governor uses terms like ‘bias’ he has an idea of the use of that word in English language discourse, that those functioning only within a non-English language may not easily follow or appreciate. While these hurdles will have to be crossed in the future, the fact today is that the central bank has been able to evolve a fairly sophisticated methodology of communication that other institutions of the government must also learn. Political communication can also lend itself to as much sophistication and subtlety as economic communication. Greater consciousness of the power of words and images in communication is a sign of maturity. Clearly, the Reserve Bank of India has evolved considerably in this area and Dr Subbarao’s lecture proved that conclusively.