December 11, 2018 4:29:00 am
Hours after Urjit Patel resigned as Governor of the Reserve Bank of India, Former Union law minister and chairman of the parliamentary standing committee on Finance M Veerappa Moily said Patel seemed under lot of pressure when he appeared before the panel last month and argued he knew that the “gentleman economist” would resign as the BJP government was out to demolish the autonomy of the institution.
“This (Patel’s resignation) was inevitable. Because he is a gentleman economist. After all, the Reserve Bank of India (RBI) will have to be heard in the management of the finances of the country. This government has been putting all sorts of pressure in its functioning and interfering in the autonomy and independence of the RBI. It is a time tested institution which really served the economy well,” Moily told The Indian Express.
“We could see the kind of pressure they were putting on him. He wanted to reassert about the reserve money with the RBI. He wanted to assert himself. That is what we could find. I knew that he will be compelled to resign because of the pressure. The NDA government never tolerated independence and autonomy of the RBI. They wanted to the treat the RBI as one of the minor departments of the government. Governments cannot be run like that. That is why the economy is collapsing day by day,” he added.
Moily hit out at the government saying it wanted to interfere with the monetary policy and the financial management. “Then they wanted to control the functioning of the RBI by (putting in place) a management committee. With all this, no self respecting economist or a gentleman can function. They wound up the Planning Commission and instead brought in the Niti Aayog and with no economist at all in managing it.”
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Talking about institutions, he said the government demolished the CBI and interfered with the Supreme Court. The University Grants Commission has also been demolished. “Now their eyes are on RBI.”
“And Patel resisted. Ideally, Raghuram Rajan should have been given an extension. They did not give. They thought Patel will be their handmaid and he will practically obey the government. That has not happened. On one side, the bureaucrats of the Finance Ministry and on the other side the political hierarchy in the NDA particularly the Finance Minister and Prime Minister started interfering on a day to day basis.”
There was absolute stress on him, total pressure on him. Even then, he (when he appeared before the committee) asserted and pleaded for the autonomy and independence of the RBI in matters of economy, matters of inflation and regulation of the banks … I knew what one day or other (he would resign). We were expecting that on November 19th he will resign. But he did not do that. It was inevitable. The kind of pressure they were putting. One nominee of the Governor … that (S) Gurumurthy came … he came here just to demolish the autonomy of the Reserve Bank,” Moily said. Asked whether Patel confided in him, he said “I could see that … by his body language, his presentation, while giving the evidence … I could see that there was lot of pressure built on him. I don’t think that any gentleman economist can continue. That is why Arvind Subramanian has resigned and gone … they want to impose decisions … non economists … people who are politically motivated … they cannot tolerate any economist. That is why even the Niti Aayog man (Arvind Panagariya) also ran away.”
Asked about Patel’s successor, Moily said this government does not want advise. “The manner in which they are appointing people show that they only want handmaiden. They don’t want good counsel, good economists in positions,” he said.
Senior Congress leader Ahmed Patel, meanwhile, said the manner in which Patel has been forced to quit is a blot on India’s monetary and the banking system.
“The BJP Government has unleashed a de facto financial emergency. The country’s reputation and crediility is now at stake,” he said.
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