New RBI Governor: Tricky Road Ahead For The Central Bank And Government
The exit of Urjit Patel indeed left all by surprise as a shock to the establishment & leaves many questions unanswered. However, this was not the first time that RBI governor had resigned. In the past, Raghuram Rajan too had resigned as he was not getting his term extended. Former Finance Secretary & member of the Finance Commission, Shaktikanta Das, who was the main force in post-demonetisation scenario to normalize the plight of the economy, has been made the new Governor of the Reserve Bank of India.
Critics are remarking that this a crucial time when institutions are under the scanner with vested political forces trying to do away with credibility and autonomy. There are questions being raised that whether this appointment is a quid pro quo for the work done by the incumbent now for the establishment in demonetisation time as such an appointment then further reaffirms the fear that government is acting in a way to destroy institutions like RBI.
However, the healthy functioning of the central bank is essential for the nation. With the appointment of new governor, there are vexing issues that the incumbent in office has to look after which is important looking at the fact that economic situation in the nation needs an uplift- namely rate cuts Liquidity ease, tax sops, MSPs, etc as all these are crucial for sane economic health of the country.
With unexpected resignation and vagaries of electoral politics with the battle for states followed by Lok Sabha stock market, economic pundits can feel the heat of worry of the citizens and investors too. This is why the new governor must work to restore the credibility of the the central bank in order to ease out these anxieties of investment climate. The need of the hour is to drive the nation and economy out of a gloomy scenario that has risen because of such volatile entry and exit.
With falling rupee and risky nature of any investment scenario, investors need the right zeal of confidence for the balanced functioning of financial markets. The establishment forces have a lot to do to, keeping into account inflation, and at the same time working to strive for financial stability.
Markets may be fluctuating and volatile and serious introspection is needed by the new governor that is the task of restoring the credibility of the RBI. Some deliberation by the government is also needed to allay the fears of the investors who were positive about India's investment prospects but were left in trouble.
