Hindustan Times (Delhi)

RBI’s new chief a low-key, publicity-averse reformer

- Beena Parmar and Ramsurya Mamidenna letters@hindustant­imes.com

MUMBAI:The event: Gyan Sangam 2015 . The venue: Pune. Prime Minister Narendra Modi had just finished his four-hour long meeting with bankers, and journalist­s, who were kept out of bounds, were rushing to catch a briefing of the conference.

While heads of banks and top finance ministry officials sped away in their vehicles, Urjit Patel, deputy governor of the Reserve Bank of India, was seen hurrying alone to hail a cab, his head bent, politely declining to talk. It emerged later that much of what RBI enumerated at the Gyan Sangam — future actions on bad loans and the renewed focus on inflation targeting — had his active involvemen­t. That sums up Patel’s persona.

“Neither hawk nor dove, but owl. The owl is traditiona­lly a symbol of wisdom. We are vigilant when others are resting,” Patel said after the January 2014 monetary policy — one of the rare instance when he resorted to an analogy to make his point.

Kenya-born Patel has strong views on RBI’s contributi­on to India’s growth. “Don’t try and put us into buckets. We are doing what is necessary for the economy. The primary focus is not investors or markets, it is the con- NEEd to ExaminE mEtric For EFFEctivE lEnding, prioritisE loans to EntErprisE­s which will gEnEratE morE EmploymEnt ImplEmEnti­ng a comprEhEns­ivE GST should not bE dElayEd sumer,” Patel had said during a press conference after the January 2014 monetary policy review.

“The positive transforma­tion set in motion by governor Rajan, starting with the recognitio­n of problems associated with both high inflation and weak bank balance sheets, is not yet complete,” said Thomas Rookmaaker, director, Asia-Pacific Sovereigns Group, Fitch Rating. “Having served as deputy governor in the past three years, Patel is well-positioned to further institutio­nalise these policy changes in the period ahead.”

Apart from inflation targeting, Bringing down govt-inducEd dEmand in budgEt hElps bring down inFlation ExpEctatio­n, drivE privatE invEstmEnt

ExpEnditur­E mitigation can bE through phasEd Expansion in subsidiEs so that thE impact is sprEad ovEr sEvEral yEars

MorE durablE invEstmEnt can bE ExpEctEd iF wE liFt voting rights oF ForEign invEstors in Indian banks Patel’s appointmen­t is seen as a move to actively focus on NPAs in infrastruc­ture. In October 2014, Patel had said: “What we have to think through in infrastruc­ture is that predominan­tly funding has to be from domestic sources, because infrastruc­ture investment produces services, which are non-tradeable... Also, if one goes behind the NPA numbers related to the sector, they are not white elephants as such. These assets generate a stream of output that has ready demand. They can quickly start bringing in cash flows if we fix fuel supply, reduce distributi­on losses.”

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