Tough act to follow
With reference to the article, “What to look out for with Urjit Patel in charge”, Madan Sabnavis (FE, Aug 23).While former RBI Governor D Subbarao often invited the accusation of stirring unnecessary controversy and doing grave injustice to his political masters, Raghuram Rajan succeeded to a large extent in evading that ignominy and defending his legacy. He also brought a fundamental shift in Indian banking by initiating the process of bad debt clean-up and engaging banks in resolution of their non-performing assets. Now, it is imperative for the new RBI Governor Urjit Patel to carry Rajan’s legacy forward and transform India’s ossified financial system. As the head of the newly constituted Monetary Policy Committee, he will have a significant role to play in setting policy rates and bringing the government and the RBI on the same page.
Shreyans Jain, New Delhi
All for curbing inflation
Apropos of the editorial, “Deciphering Urjit Patel” (FE, Aug 22), Urjit Patel is taking over the leash of India’s central bank at a very critical juncture. His predecessor, Raghuram Rajan, has already institutionalised many reforms and stiff measures, for which he had to take-on a lot of heat from different circles. The new governor must carry forward this tradition of stiff control over inflation and monetary policy. The task of rooting out bad loans from ailing banks, and injecting growth into the market remains pending. Moreover, this is one of the few appointments of the present dispensation which is free of political considerations. Also, it is one of the few times when someone from in-house, i.e., from within RBI has been appointed, or rather promoted, to RBI governorship. For effective working of RBI, the government must not indulge in constant politicking and fist-fighting, and must provide a renewed environment free from any undue interference.
Gaurav Singhal, Rewari, Haryana
Markets not too cheery
Apropos to the news “Markets give nervy welcome to Patel” (FE, Aug 23) Markets swimming against global headwinds for over two years, were hoping for help from RBI and the government. The profile of the new governor hardly gives them the needed solace. RBI has plenty on hand, given a global economic stasis. The huge liquidity flooding, post 2008, is not ebbing away even after eight years. Instead, key economies are persisting with more of it, disrupting cross currency evaluations to impinge on world trade. RBI has the onerous job of managing the rupee vis-a-vis exports and a subdued domestic inflation would be of much help. The government can additionally lend a hand with studied fiscal conservatism. By opting for Urjit Patel, it appears to be willing to do so, at least till major state elections in 2017.
R Narayanan, Ghaziabad