New Delhi, December 11: Opposition parties on Monday attacked the government over RBI Governor Urjit Patel's resignation, with former prime minister Manmohan Singh saying it was a "severe blow" to the country's economy. Patel, who had a run in with the government over autonomy of the central bank, resigned from his job earlier on Monday, citing personal reasons. He had more than eight months left in his three-year tenure.
He was hand-picked by the BJP-led government after his predecessor Raghuram Rajan was denied a second-term. His resignation came amid widening rift between the government and the RBI on several key issues including the central bank's autonomy. In a statement, Singh said he hoped that the RBI Governor's sudden resignation is not a harbinger of Prime Minister Narendra Modi-led government's attempts to "destroy" the institutional foundations of India's USD 3 trillion economy. Urjit Patel Resigns as RBI Governor Citing 'Personal Reasons'.
Dr Urjit Patel is an economist of a very high calibre with a deep and insightful understanding of macro-economic issues. He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability.
— Narendra Modi (@narendramodi) December 10, 2018
He said it will be "foolhardy" to diminish institutions for short-term political gains. After Patel announced he was stepping down due to personal reasons, Prime Minister Narendra Modi lauded his contribution and legacy, saying he steered the banking system "from chaos to order" and ensured discipline. Leaders of various opposition parties alleged that institutions like the central bank were under "assault" and there was a "financial emergency" in the country. Who Will be the Next RBI Governor as Urjit Patel Resigns? Here are 3 Likely Contenders.
Dr. Urjit Patel is a thorough professional with impeccable integrity. He has been in the Reserve Bank of India for about 6 years as Deputy Governor and Governor. He leaves behind a great legacy. We will miss him immensely.
— Narendra Modi (@narendramodi) December 10, 2018
Congress president Rahul Gandhi said one more independent institution has "fallen" and alleged that the BJP has "demolished every temple of modern India" and will destroy India, if not stopped. Addressing the media after a meeting of opposition leaders, Gandhi said in the middle of the meet "we were told that RSS-BJP agenda is progressing further". The RBI chief has resigned because he can no longer work in this government, he alleged.
"With the RBI Governor's resignation one more independent institution has fallen. The BJP has demolished every temple of modern India and if not stopped, will surely destroy India itself," Gandhi said in a tweet. While Modi said Patel leaves behind a great legacy and will be missed immensely, Finance Minister Arun Jaitley appreciated the service rendered by Patel saying it was a pleasure to deal with him and he has benefitted from the economist's scholarship. The opposition, however, was unsparing in its criticism of the government over the development and alleged interference in the working of all institutions.
"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," Singh said. "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," he said.
He noted that he has known Patel to be an economist of high repute and also someone who cared deeply about India's financial institutions and economic policy. The former prime minister recalled RBI Deputy Governor Viral Acharya's apprehensions 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," Singh said. Former finance minister P Chidambaram said he was saddened but not surprised by Patel's resignation and claimed no self respecting scholar or academic can work in the NDA government.
In a series of tweets, the senior Congress leader said the last meeting of the Reserve Bank of India Board, held on November 19, was the "day of reckoning" and Patel should have resigned on that day. "Government's immediate agenda is to grab the reserves of the RBI to meet its fiscal deficit target and to get funds for spending in an election year," Chidambaram alleged. West Bengal Chief Minister Mamata Banerjee, who also attended the opposition meeting, hit out at the Modi government over Patel's resignation, saying it was a matter of "great shock". "Institutions, from the CBI to the RBI, have become total disasters. This has never happened before. It is a matter of great shock. We must protest," she said.
The Trinamool Congress chief proposed that the meeting be continued on Tuesday and opposition leaders should meet President Ram Nath Kovind over Patel's resignation. Later, in a tweet, Banerjee said: "The RBI is the custodian of public money. The credibility of all institutions is being destroyed. This is a financial and economic emergency". Andhra Pradesh Chief Minister and TDP supremo N Chandrababu Naidu, who coordinated the opposition meeting that was held to discuss forging of an anti-BJP front for 2019 polls, alleged that there was "pressure" from the government on RBI to give its surplus.
"He (Patel) tried his best to protect the economy and the nation in the interest of the public. Finally he was unable to bear the pressure and resigned," he said.
Delhi Chief Minister Arvind Kejriwal alleged that RBI governor Patel was eased out by the BJP-led NDA government at the Centre to bring in a "more pliable" person to fill the post. No announcement of Patel's replacement has been made yet.