Did Urjit Patel's hawkish stance on inflation win him top job at RBI?
Archana Khatri Das
New Delhi: Urjit Patel's appointment as the next Reserve Bank of India chief did not come as a surprise. He was always seen as one of the prominent contenders for filling in Rajan's shoes.
Patel's appointment brings us to the point that government and Raghuram Rajan were indeed on the same page on monetary policy stance and banking reforms. The 'hawkish' stance of RBI governor had indeed Finance Ministry's consent, or so it appears now.
It appears that Urjit Patel also bears a 'hawkish' stand on inflation. There were several names doing the rounds as probable successors to Raghuram Rajan, who announced in June that he would not seek second term when his tenure gets over in September. But, what was seen common among the probables was that most of them carried ' neutral-to-dovish' stance in fighting inflation, unlike Rajan.
Much of social media went into gloom when Rajan announced his exit in June. People of India loved the strong sentiment of hope he radiated with his outspoken ways. The disillusionment stemmed from anger that government lacked motivation in retaining a man who was doing a fantastic job with great personal integrity. Doubts were raised over government's commitment to structural reforms.
We may get to read in a biography written by an 'insider' some years from now, why Raghuram Rajan could not stay for second term as RBI chief. For now, we know that the appointment of Urjit patel as the next RBI governor speaks of government's concern in reining the monster of inflation and seriousness in completing the task which Raghuram Rajan leaves behind and move on the path of macroeconomic stability.