Modi government wants RBI governor Urjit Patel out like Raghuram Rajan, says P Chidambaram

Chidambaram’s barb has come amid the conflict between the government and the central bank over regulations and reserves.

Senior Congress leader P Chidambaram has claimed that the Narendra Modi government wants Reserve Bank India (RBI) governor Urjir Patel to go, which will be a “repeat of the Raghuram Rajan story.”

Chidambaram’s barb has come amid the conflict between the government and the central bank over regulations and reserves. The government wants the RBI to go easy on restrictions on weak banks, while the regulator wants to continue with its policies.

The former finance minister, in a tweet, on Saturday said, “Swadeshi Jagran Manch wants Dr Urjit Patel out. That means the Modi government wants him to go. It is a repeat of the Raghuram Rajan story.”

Swadeshi Jagran Manch wants Dr Urjit Patel out. That means the Modi government wants him
to go. It is a repeat of the Raghuram Rajan story

— P. Chidambaram (@PChidambaram_IN) November 3, 2018

The fight between the government and the RBI came to light when some media reports claimed that the government has invoked its special powers to issue consultations on several issues. The government was said to have invoked Section 7 of the RBI Act.

However, the government soon swung into action and issued a statement, calming the markets, by saying that it has nourished and respected the autonomy of the central bank. Nonetheless, a tweet by Revenue Secretary Subhash Chandra Garg created a furore, in which he was understood have been taking a dig at RBI deputy governor Viral Acharya.

Rupee trading at less than 73 to a dollar, Brent crude below $73 a barrel, markets up by over 4% during the week and bond yields below 7.8%. Wrath of the markets?

— Subhash Chandra Garg (@SecretaryDEA) November 2, 2018

Acharya, in a speech recently, had said that the governments that undermine the independence of the central bank suffers wrath of the markets.