Manmohan Singh sheds copious tears for Urjit Patel

Once believed by Prime Minister Narendra Modi's detractors to be a bad choice to succeed Raghuram Rajan as RBI governor, Urjit Patel turned into the opposition's poster boy moments after he resigned. Here's Modi's predecessor Manmohan Singh with a changed view of Patel

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New Delhi: Former Prime Minister Manmohan Singh has issued a statement sympathising with the outgoing RBI Governor Urjit Patel.

“It is with great sadness that I received the news of the resignation of the Governor of the Reserve Bank of India, Dr Urjit Patel.”

“I have known Dr Patel to be an economist of high repute and also someone who cared deeply about India’s financial institutions and economic policy. Dr Patel’s sudden resignation, at a time when the Indian economy is faced with many headwinds, is very unfortunate and is a severe blow to the nation’s economy.”

“There have been apprehensions expressed earlier by the deputy governor of the RBI about the government’s intent to raid the capital reserves of the RBI for fiscal purposes. I hope the resignation of the Governor is not a sign that this may soon become a reality.”

“Building institutions take a long time and effort but they can be destroyed in a whimper. It is institutions such as the RBI, among many others that have served as the edifice of our great nation’s progress since independence. It will be foolhardy to diminish these institutions for short-term political gains.”

“I wish Dr Urjit Patel success in his future endeavours. I also sincerely hope that this sudden resignation of the Governor is not a harbinger of the Modi government’s attempts to destroy the institutional foundations of India’s $3 trillion economies.”

Before Patel’s resignation

As recently as November this year, a 31-member Parliamentary Standing Committee on Finance, which includes former Prime Minister Manmohan Singh had made a plan to question Patel on various issues like demonetisation, state of the Indian economy and the RBI governor’s working relationship with the government.

The parliamentary panel with Singh as an eminent member, sources said, wanted to ask Patel if the central bank had a problem in regulating public sector banks, it should have raised it earlier and, instead of raising it at a forum, should have brought it up with the government and dealt with the situation. Additionally, the panel wanted to raise issues over what additional scope the RBI needed to alleviate the pains of the banking sector and specifically the PSBs.

In November, Singh was also happy that the government and RBI had struck a reconciliatory note after rumours ― denied by Finance Minister Arun Jaitley ― that the Narendra Modi dispensation would invoke the rarely used Section 7 to curb the powers of the central bank.

Without naming either PM Modi or RBI Governor Patel, Singh had said that institutions of the country were being “systematically denigrated”. Ironically, Singh now believes that Patel’s resignation is an instance of denigration of institutions, too.