Government of India appoints new RBI Governor
By Maitreya Thakur
The Government of India appoints Urjit Patel as the new Governor of India’s Central Bank, the Reserve Bank of India (RBI)
The much awaited announcement regarding the appointment of a new RBI Governor came with the government of India appointing Urjit Patel to the key post. The surprise resignation of the outgoing Governor, Raghuram Rajan, kicked up a political storm with the opposition accusing the Government of interfering with the Central Bank’s independence. Rajan had come under fire for his controversial comments, once dubbing the Indian economy the ‘one-eyed king in the land of the blind.’
Urjit Patel has been one of the four Deputy Governors at the RBI since 2013 and is seen as a key aide of Raghuram Rajan. He is thus expected to largely continue the policies which Rajan brought in. Additionally, investors expect him to carry on the fight against inflation, thereby offering stability and continuity to the nation’s economy. Patel also comes with strong academic credentials and his appointment has received widespread praise in the media and among investors.
With his appointment, the Government has sought to send a clear message that it was neither opposed to the independence of the Central Bank nor to the policies which Rajan advocated. However, at the same time, Patel’s reticent and media shy personality hints at the fact that the Administration was unimpressed by Rajan’s outspoken temperament.
The Government’s choice may have surprised many but it appears that the desire for continuity combined with Patel’s reserved nature ultimately helped him triumph above the competition. The most popular candidates for the role were Arvind Panagariya (Vice Chairman of Niti Aayog) and Arvind Subramanian (Chief Economic Advisor).
