Urjit Patel’s tough love to stabilise the Indian economy and the eventual face off with the government — here’s how it happened
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- The governor to India’s central bank resigned on 10 December 2018 citing ‘personal reasons’.
- There were reports that the RBI and the Indian government had reached a consensus or a ‘truce’ between their objectives.
- While politicians and academicians in the country have different views on ‘why’
Urjit Pateltook such a drastic step, we can track a course of events leading up to this development.
Urjit Patel resigned from his position as the governor of the Reserve Bank of
Saddened, not surprised, by Dr Urjit Patel's resignation. No self respecting scholar or academic can work in this government.— P. Chidambaram (@PChidambaram_IN) 1544446634000
Patel cited ‘personal reasons’ behind the resignation but considering the recent animosity between the central bank and the Indian government, it’s not unreasonable to assume that the governor of the RBI and the ruling party had serious differences on the functioning of the RBI.
In the days leading up to his resignation, while nothing was said explicitly, there was open speculation that Patel may walk since the RBI and the Bharatiya Janata Party (BJP) did not see eye-to-eye on issues of non-performing assets, credit-flow to small and medium enterprises, as well as the central bank's autonomy and the demand from the government that RBI should part with its surplus capital--a controversial move that raised concerns about the government’s intentions given its ongoing struggle to meet its fiscal deficit targets.
Here’s everything that led up to Patel resigning from the RBI, India’s central bank.