The short answer may be that he is a dove.
One of the government’s appointees to the monetary policy committee, Ravindra Dholakia has published 47 monographs, 22 books, and more than 140 research papers as a professor of economics at India’s top management institute.
Two of his recent papers offer clues to how he thinks about monetary policy.
In a 2015 paper called How Costly is the Deliberate Disinflation in India?, Dholakia and his co-writer argued that a policy of deliberate disinflation needs to consider the real cost of sacrificing output and employment, particularly when its magnitude is substantial.
In a previous paper released in February 2014 called Cost and Benefit of Disinflation Policy in India, Dholakia wrote about the effects of disinflation on growth.
“The RBI (Reserve Bank of India) governor’s assertion on no serious trade-off existing between inflation and growth in the country does not get any support from recent empirical evidence,” he wrote. “On the contrary, deliberate disinflation would impose sizeable immediate cost of loss of output on the system.”
“Very broad and conservative estimates of the costs and benefits suggest that 1 percentage point of deliberate disinflation may entail about 1% loss of potential output over short to medium term, and a gain of about 0.5 percentage points in the growth after 4 to 5 years,” the paper added.
Under such conditions, RBI should hold nominal growth of money supply and allow supply-side policies by the government to bring down inflation, the paper had said.
Much has changed since Dholakia wrote those papers. India has moved to a new monetary policy framework under which the central bank has to meet a flexible inflation target and a six-member panel, and not the governor alone, takes a call on interest rates.
Dholakia couldn’t be reached on his office landline phone at the Indian Institute of Management, Ahmedabad.
Dholakia is no stranger to government work. He has served on at least 13 government and central bank panels including one that recommended the creation of a postal bank. He has also been a member of the central government’s sixth central pay commission, public expenditure management panel, and the Gujarat government’s state public finance reform committee.
Dholakia’s profile at the IIM-A website lists microeconomics and macroeconomics including policy analysis, economic development and planning including aspects like health, education, labour, regional disparities, energy and input-output analysis as his areas of research.
His colleague Errol Dsouza, a professor at IIM-A, says Dholakia “has worked closely with the central government (and his) expertise on real economy will add immense value to policy making.”
Dholakia has served as independent director on the boards of several companies, including state-owned Power Finance Corp. and Gujarat State Petroleum Corp. Ltd. Incidentally, RBI governor Urijit Patel also served on the board of Gujarat State Petroleum (although in an earlier period.) Dholakia was also an independent director at Adani Enterprises Ltd, where he resigned in May as well as shareholder director at Union Bank of India.