Shock resignation: on Urjit Patel quitting as RBI chief
Urjit Patel stepping down as RBI Governor is a major embarrassment for the government
The Reserve Bank of India Governor Urjit Patel has cited
personal reasons for resigning with immediate effect, but anyone who has
followed the events of the last couple of months will know it was anything but
that. It was a period during which the Centre and the RBI were engaged in an
unseemly tussle
over a clutch of issues that had a bearing on
the RBI’s autonomy, something that Mr. Patel had sought to preserve. As his
predecessor Raghuram Rajan pointed out, when a public servant resigns, it is a
sign of protest. Mr. Patel’s decision clearly caught everyone by surprise as
it came following perceptions of a thaw in relations between the Centre and the
RBI, after an agreement was hammered out at a board meeting last month on
some of the contentious issues, including a controversial proposal to use the
central bank’s reserves for fiscal purposes. But clearly, the larger issue that
divided the Centre and the RBI — which related to autonomy and the independent
functioning of the Governor — was never fully resolved. Mr. Patel’s resignation
is a serious embarrassment to the NDA government, which has scrambled
to make statements expressing surprise at his action and praising him for his
work. As attempts to signal that it had nothing to do with Mr. Patel stepping
down and to reinforce
that he did indeed quit for personal reasons, these remarks were largely
unconvincing.
Mr. Patel’s resignation is bound to raise questions about the Centre’s
ability to work with independent-minded economists, coming as it does following
the departures of former RBI Governor Raghuram Rajan, who was at odds with
the Centre on many issues, and the sudden resignations of Niti Aayog
Vice-Chairman Arvind Panagariya and Chief Economic Adviser Arvind Subramanian.
It is true that Mr. Patel’s reclusive and non-communicative style may not
have
endeared him to some bankers, but his eminence as an economist and his
understanding of macro-economic issues is undisputed. Governments have sparred
with the RBI before on the issue of autonomy, but the NDA government went one
step further by starting consultations under Section 7 of the RBI Act, which
gives the Centre the power to direct the RBI to act in specific ways. The
immediate priority now is for the Centre to fill the breach without wasting
time. Global investors and the markets are already on edge, and they will be keenly
watching, along with the ratings agencies, how the Centre handles this
self-created crisis. The incoming Governor is bound to be judged, among other
things, by perceptions about his independence. The RBI cannot be treated as if
it is just another government department. And the Centre will now need to
demonstrate that a post-Patel central bank will continue to
enjoy operational autonomy. Anything less will not go down well with both investors
and the markets.
Courtesy: The Hindu
01. Stepping down (phrasal verb) – resign, stand
down, give up one’s job, give up one’s post.
02. Embarrassment (noun) – humiliation, loss of face,
uneasiness/discomfort.
03. Anything but (phrase) – not at all.
04. Tussle over (noun) – fight, skirmish/scuffle;
quarrel.
05. Clutch (noun) – group, collection, set.
06. Have a bearing on (phrase) – have a relevance/relation to
something.
08. Catch someone by surprise (phrase) – surprise, shock, stun someone (as something
happened unexpectedly).
09. Thaw (noun) – an increase in friendliness.
10. Hammer out (phrasal verb) – thrash out, sort
out, decide on/negotiate (something arduously/difficultly).
11. Scrambled (verb) – struggle, rush/hurry,
hasten.
12. Reinforce (verb) – strengthen/support,
fortify, bolster up/buttress/underpin.
13. At odds with (phrase) – in conflict, in
disagreement, in variance with.
14. Reclusive (adjective) – solitary,
secluded/isolated, introverted.
15. Endeared (verb) – inspire, attract,
cherish/charm.
16. Eminence (noun) – distinction, greatness,
calibre/reputation.
17. Macro-economic (adjective) – relating to the
branch of economics concerned with large-scale factors (interest rates/national
productivity).
18. Sparred (verb) – quarrel, argue/disagree, have
a row/fight.
19. On edge (phrase) – anxious, apprehensive, uneasy/unsettled.
20. Go down (phrasal verb) – be successful, have an impact, triumph.
Note: All
meanings took from Oxforddictionaries.com and Google.co.in only.
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