The shock resignation of Reserve Bank of India Governor Urjit Patel has evoked strong reactions from economists. The latest in the series is former Prime Minister Manmohan Singh, himself an economist, has termed the development ‘very unfortunate’ and ‘severe blow’ to the country’s economy.
Dr Singh said that he sincerely hoped that the RBI Governor’s sudden resignation was not a sign of Prime Minister Narendra Modi government’s attempts to ‘destroy’ the institutional foundations of India’s $3 trillion economy.
According to news agency PTI, Dr Singh said that it will be ‘foolhardy’ to destroy institutions for short-term political gains.
Manmohan Singh’s comments follows strong reactions from former RBI Governor Raghuram Rajan, who said that Indians must worry about the consequences of Patel’s resignation, the first in India’s history. He was quoted by Reuters, “I think this is something all Indians should be concerned about because strength of our institution is really important both for growth and sustainable growth in equity and the economy.”
Patel had resigned on Monday evening citing ‘personal reasons. His resignation note had read, “On account of personal reasons, I have decided to step down from my current position effective immediately,” said the 55-year-old in the letter announcing his shock resignation, with over a year left in his term.”
Experts say that he was forced to step down following his differences with the central government, which has been accused of making desperate attempts to destroy the independence of the country’s federal bank.