Urjit Patel, the new RBI governor, is all set to present his first monetary policy review. This is also the first credit policy review of the bank under the new Monetary Policy Committee (MPC) framework. Interestingly, Urjit Patel is the architect of the MPC and in his earlier capacity as the deputy RBI governor worked extensively on finalising its framework and setting inflation targets in tandem with the government. Patel, who is widely known to be close to his predecessor Raghuram Rajan, is in limelight not only because it is first policy review, but also because the markets and economists are looking at him to signal a continuity in policy approach.
For the uninitiated, Patel had been RBI deputy governor from 2013 till the time he took over from Rajan in early September. Apart from the fact that Patel is credited for authoring the landmark MPC reform, he is also known to be an ‘inflation warrior’. This goes in line with the MPC’s primary goal of inflation targeting. The fact that PM Modi has chosen him to replace Rajan assumes significance in the backdrop of the 4% inflation target that has been agreed upon between the central bank and the government. Patel is also known to have helped bring about key changes that are considered to be among the most significant monetary policy reforms since India opened up its economy in 1991.
Before being appointed as the RBI governor, Patel was incharge of the monetary policy, economic policy research, statistics and information management and deposit insurance among other key tasks at the central bank. He is a PhD in Economics from the Yale University and has done his graduation from the University of London and Oxford. He has been associated with the IMF (International Monetary Fund) in the past and has also had a stint with the government. He has served as a Consultant to the Ministry of Power, Department of Economic Affairs from 1998 to 2001. From being Chief Policy Officer at IDFC to having two decades of experience in the financial, energy and infrastructure sectors, Patel has a wide ranging understanding of a host of issues – a fact that would help him better understand the economy and its inflation and growth balance.