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Government's institutional dilemma – exit of RBI Governor
The recent untimely & sudden resignation of RBI Governor Urjit Patel has created multifold issues on government's institutional dilemma.

The all of a sudden exit of the Governor has surprised many, but expected to some extent with the prevailing working environment at RBI & the relationship with the govt.  Be it invoking of section7 of RBI act or the utilization of surplus capital, the matter is under discussion with RBI Board and within the Government's as well.

Government needs immediate introspection on all institutional issues. Majority opinion may disapprove the recent developments on RBI Governor, which will basically derail the many monetary reform policies undertaken by Mr. Patel. The deputy governor's outburst on govt's interference on functioning of RBI was a wakeup call not only for New Delhi but for all stakeholders (advisors, economists and market specialists etc.).

On the contrary, Patel should have taken this decision on complex and crucial issues like Surplus Fund management, Liquidity, More autonomy for RBI etc with the system, not outside. In whatever case may be, resignation of Patel is a loss-loss both for the government and Patel himself.

If Patel thought that transfer of surplus capital to government's kitty is not a sound economic decision and many other debatable issues, then it was very necessary for him to stay on and discuss & deliberate within the system. Rather he has decided to call the shot. The decision was more public than personal in nature.

However, Patel will be remembered for his approach on inflation target and for his being vocal on other issues like NPAs, more powers for RBI on handling irregularities on bank frauds etc. He had also stood by the government on many occasions, more particularly during demonetization as well as handling of money management afterwords.

Now the change of guard at RBI is yet to be seen with the new governor's approach on monetary policies and government's views on handling of economy for the days to come.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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