Macroeconomist Patel is a terrific choice, says Jagdish Bhagwati

NEW DELHI: Globally acclaimed economist Jagdish Bhagwati on Saturday hailed the appointment of Urjit Patel as the next Reserve Bank of India governor as “terrific choice“, saying he is an ideal person to head the central bank.
“Dr Urjit Patel is a terrific choice. A student of the great Indian economist, Professor T N Srinivasan, and also a macroeconomic expert trained at Yale, Patel will be an ideal governor who can take over with distinction and continuity from Dr Raghuram Rajan,“ Bhagwati told PTI.He is professor of Economics, Law, and International Relations at the Columbia University in the US.
“With the brilliant Arvind Panagariya continuing as his chief economist, and Urjit Patel at the RBI, Prime Minister now has the world's finest economics team, augmented by Bibek Debroy and Arvind Subramanian, that promises continuing reforms beyond the politically skillful passage of GST,“ Bhagwati added.
Hopefully, he added, “the days of anti-reform, anti-growth advisers that undermined our economy in the UPA-II years will now be strictly behind us“.
The government in a statement on Saturday announced the appointment of Patel as the next RBI governor for three years with effect from September 4. He will replace Raghuram Rajan. Patel is currently the deputy governor of RBI and is holding this assignment since 2013.
While the markets were not exactly looking forward to an inflation hawk, the choice of Patel appears to have added to the credibility of policymaking.“(Patel) has the expertise and international stature to head RBI. We expect that the focus on reforms, inflation control and exchange rate stability will remain and get strengthened,“ said Rashesh Shah, chairman, Edelweiss Group.
Fund managers say that more than a rate cut boost, reinforcing confidence of international investors is key to stability in the markets. “The new governor needs to reinforce and continue the faith that the external world and Indian markets have in the independence and objectivity of the central bank. He should continue to work with the Government on reducing long-term inflation expectations and maintain stability in the currency,“ said Mihir Vohra, director and chief investment officer, Max Life Insurance. The possibility of a more harmonious relationship between RBI and the finance ministry has also raised hopes of a ratings upgrade. The choice of Patel has promoted economists to believe that the government is keen to send a strong signal “In the current context of the economy where the fiscal and monetary policy need to work together, continuity of a monetary policy expert as RBI governor will be viewed very positively by the International Rating and Investing Community and will work to India's advantage over the medium term,“ said Dhananjay Sinha, head -institutional research, economist & strategist, Emkay Global Financial Services.
“The news of Urjit Patel's appointment as the RBI Governor is a step in the right direction.Having worked with Rajan, and being an existing part of the RBI machinery, this is a welcome and natural progression. We are hopeful that he will continue the good work of balancing inflation while encouraging economic growth,“ Sunil Godhwani, wholetime director & CEO, Religare Enterprises, said.
BoI non-executive chairman G Padmanabhan said, “Excellent choice. This will ensure continuity of approach and policies of RBI in several areas. He was also a part of the team in RBI that did the fire fighting during taper tantrum period.“ Ananth Narayan, regional head of financial markets, Asean and south Asia, Standard Chartered Bank, said it's good to have the uncertainty and suspense out of the way.