File photo of Manmohan Singh signing the register after taking the oath of office as Prime Minister in New Delhi on May 22, 2004. (Photographer: Amit Bhargava/Bloomberg News)

Patel’s Resignation Severe Blow To Economy, Says Manmohan Singh

Urjit Patel’s resignation as the Reserve Bank governor is ill-timed and will be a blow to the Indian economy, according to former Prime Minister Manmohan Singh.

“Dr. 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,” Singh said in a written statement. “I also sincerely hope that this sudden resignation of the governor is not a harbinger of the Modi government’s attempts to destroy the institutional foundations of India’s $3 trillion economy.”

Singh, who has also served as the country’s finance minister, said that he hopes that the government won’t use this resignation to transfer RBI’s surplus capital to itself, one of the contentious issues that Patel had opposed. “There have been apprehensions expressed earlier by the Deputy Governor of the RBI about the government’s intent to raid the capital reserves of the RBI for fiscal purposes,” he wrote. “I hope the resignation of the Governor is not a sign that this may soon become a reality.”

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.
Manmohan Singh, Former Prime Minister of India

Also read: Reserve Bank of India Governor Goes Far Too Quietly