Urjit Patel: The silent revolution of an owl


MUMBAI: Raghuram Rajan is among the most articulate persons to have occupied the post of the Governor at the Reserve Bank of India. His chosen successor Urjit Patel appears to be a man of few words.

Patel has nearly spent 44 months at the central bank as deputy governor but a search of RBI’s website for his speeches throws up just one. Contrast that with nearly 38 for Rajan whose oratory has ranged from Francis Fukuyama’s political thoughts to gently lecturing Janet Yellen of the US Federal Reserve on prudence, Brexit and tolerance in societies.

But that one speech of Patel’s is good enough to show where he stands. When his boss Rajan questioned the export-centric approach of Prime Minister Narendra Modi’s Make In India initiative, Patel gave it a thumbs up.

“There are several notable interlocking drivers that have been recently initiated,” Patel said on January 13 last year at an award ceremony in what is possibly his only public speech as a central banker.

Among the programme’s positive features is “the national objective to make India a global manufacturing hub and a substantive part of international supply chains,” Patel said.”The Make in India visionstrategy is apposite and provides a muchneeded focal point to inculcate durable competitiveness in key sectors of our economy .” In a way, Patel’s appointment as governor could end the doubts emanating from Mint Street over the policies originating from 7 Race Course Road. But that does not necessarily mean the end of prudence in economic policy making. While there is nothing, except the eponymous report, in the public domain that could provide an inkling about what Patel stands for after he became the deputy governor in 2013, there is enough to suggest that he may be more loyal to the Chicago school on inflation than Rajan of Chicago.

When he was with the Brookings Institution, Patel was a critic of the central bank’s defences on inflation.

“Assertions that imported inflation and external developments-like global excess liquidity–lies at the root of price developments in India ring hollow,” Patel wrote in a 2012 paper. “What is clear is that persistence of elevated inflation is agreeable to some policy makers.The authorities want to take credit for India’s growth performance but stay blameless on the price front–a case of heads I win, tails you lose!” No wonder Rajan chose him to come up with the Monetary Policy Framework that’s now the cornerstone of India’s interest rate setting mechanism.

Great theoreticians do not always count for much when it comes to practice, which may be one factor worrying markets about Patel. And, some bankers cite a certain amount of rigidity that could lead to the occasional turbulence.

The Kenya-born Patel, who started as a research assistant at the University of London in 1983, has had a distinguished career thus far with stints in businesses, international institutions and academia.

He has been a teaching fellow at Yale and has worked for the International Monetary Fund. Patel helped the government shape infrastructure policies in the power and telecom sectors as an executive at IDFC where he also managed the proprietary equity group.

For about a year he was president, business development, at explorer and refiner Reliance Industries managing risk assessment and strategising commercial approaches for energy companies.

Handling the finance ministry won’t be new to him either. Patel’s three years at the Department of Economic Affairs between 1998 and 2001 should help him navigate those waters besides which his low-key demeanour will definitely help him deal with officialdom.

Patel, who will complete 53 on October 28, had not spared the previous government for its extravagance when he was outside the RBI.

“The profligacy of the central government has its primary driver in populist spending policies initiated in early 2008 by the ruling coalition leading up to national elections in May 2009,” Patel wrote in a 2012 article co-authored with former finance secretary Vijay Kelkar. “Three stimulus packages (including a reduction in indirect tax rates) starting in late 2008 to counter the global recessionary headwinds only accentuated matters.” But he has been on the same page as the current government when it comes to assessing the state of the economy .

In that rare speech, Patel said, “Let me conclude by quoting a participant at the inaugural session of this year’s Vibrant Gujarat Global Summit: `India will be a bright spot in an otherwise mediocre global economic outlook.’ ” But for that, for someone who famously characterised the Indian central bank as an owl and not a hawk or a dove, it has been a `silent’ progress to the 18th floor of RBI’s headquarters.