The new RBI governor, Urjit Patel could be next big hope for Indian economy

Urjit Patel Urjit R Patel will take over as the 24th governor of the Reserve Bank of India (RBI) when incumbent Raghuram Rajan demits office in the first week of September. Patel, currently serving as the deputy governor of the RBI, will hold the post for three years, starting September 4.

Since June 2016 when Raghuram Rajan announced his retirement, speculations on his successor were intense. The buzz was the government will go for some “big name” to silence those who have been questioning why someone like Rajan’s eminence and proven track record was not being given a second term.   The current boss of Niti Ayog, Arvind Panagariya, was one of them. The spin was that Panagariya in world economics is the top guy. As head of Niti Ayog he knew Indian economy, had global experience and reputation. But there was a hitch. As Niti Ayog boss, his rank was equivalent to a cabinet minister while the RBI Governor gets a junior minister protocol. The government was averse to upgrading the RBI Governor’s status. This is where Urjit Patel comes into the picture.

But Patel’s credentials are not any less lustrous. The 52-year-old Patel has an M Phil degree from University and was an adviser to the Boston Consulting Group before his appointment as RBI Deputy Governor in 2013. Considering the fact that he worked closely with Dr Rajan in implementing key policies to combat inflation, manage non-performing assets of banks, manage liquidity and forex reserves and recapitalise PSU banks, among others. 

Patel’s appointment signalled that Prime Minister Narendra Modi is in favour of a smooth transition at the RBI and continuation of Rajan’s unfinished agenda to contain inflation as well as boost growth, economic analysts and finance ministry officials said. Seen as one of Rajan’s close lieutenants, Patel will now get to implement the monetary policies of which he was a key architect. Patel, like Rajan, is rated as a strict fiscal disciplinarian, who wants to bring down inflation within the accepted limit so that the growth can be on the basis of solid economic foundation in the long run, officials said. (link)