Former finance minister P Chidambaram said that the Narendra Modi government now wants Reserve Bank of India (RBI) Governor Urjit Patel to resign as it wanted the same with former Governor Raghuram Rajan. Via a tweet, Chidambaram said this is actually engineered by Swadeshi Jagran Manch.
“Swadeshi Jagran Manch wants Urjit Patel out. That means the Modi government wants him to go. It is a repeat of the Raghuram Rajan story,” Chidambaram tweeted.
Swadeshi Jagran Manch wants Dr Urjit Patel out. That means the Modi government wants him
to go. It is a repeat of the Raghuram Rajan story
— P. Chidambaram (@PChidambaram_IN) November 3, 2018
In a separate tweet, the former finance minister quoted US Federal Reserve former Chairman Janet Yellen: “Whittling away the legitimacy and stature of institutions the public has traditionally some confidence in, ultimately undermines social and economic stability,” adding, “How true of India!”
SJM apparently insisted that the central bank officials should exercise the discipline of restraint or quit.
The clash between the Centre and the RBI following media reports that claimed that the government has invoked its special powers to issue consultations on various matters. The government reportedly invoked RBI Act’s Section 7.
Sensing the urgency to address the matter, the government soon issued a statement and said that it has nourished and respected the autonomy of the Reserve Bank. However, Revenue Secretary Subhash Chandra Garg’s tweet allegedly taking a swipe at the RBI Deputy Governor Viral Acharya actually brought the rift to public forum.
Rupee trading at less than 73 to a dollar, Brent crude below $73 a barrel, markets up by over 4% during the week and bond yields below 7.8%. Wrath of the markets?
— Subhash Chandra Garg (@SecretaryDEA) November 2, 2018
While delivering a speech, Acharya never minced his words and said that the governments that undermine the independence of the central bank suffers repercussion in the market.