Challenges before Urjit Patel
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MEANINGS are given in BOLD and ITALIC
The decision to pick Reserve Bank of India Deputy Governor Urjit Patel as the successor to outgoing Governor Raghuram Rajan is a clear affirmation (a declarartion that something is true) of the Centre’s commitment to ensure (to promise ; guarantee) policy continuity at the central bank. That the man chosen for the top job at the RBI is a person who helped formulate (to put in a clear and definite form of statement) crucial (extremely important) changes in the monetary framework, including the decision to target a specified inflation level as the primary remit (to forgive) of the bank, reflects the administration’s focus on making price stability (the condition of being stable) central to its economic agenda.
Prime Minister Narendra Modi recently reiterated (to say or do for a second time) his backing for the 4 per cent retail inflation target, at a time when the Consumer Price Index-based measure had accelerated to 6.07 per cent. The Centre’s choice of the Yale economist who has earned a reputation (what somebody is known for) as a “fiscal conservative” with a “hardline stance (the manner , posture in which one stands) ” on inflation, is in line with that thinking. Dr. Patel will need little time to settle in, given his insider credentials (evidence that a person has certain status) and experience in working with officials at the Finance Ministry. But as in all such transitions, there will also be substantive (essential ; depending on itself) change. Known at the RBI headquarters as someone who largely keeps his own counsel and prefers a low-profile and discreet (respectful of privacy or quiet) working style, Dr. Patel is unlikely to grab (to grip the attention) headlines as frequently as his plain-speaking predecessor (one whom another follows or comes after) has done.
And that is another factor that must have weighed in his favour.The first among many challenges that the new Governor will face will be the changed circumstances (that which attends, or related to, or in some way affects) of monetary policy formulation. When Dr. Patel chairs the first meetings of the Monetary Policy Committee — the six-member panel that is expected to start deciding interest rates from the October 4 policy announcement onwards — it will be interesting and instructive to see how he helms (a position of leadership or control ; a guide) the committee approach to rate-setting. As the head of the banking regulator (a device that controls or limits something), Dr. Patel also inherits the ongoing clean-up of bank balance sheets. Unclogging (to remove a blockage from) the credit pipeline by helping resolve the build-up of stressed assets (something or someone of any value) with the country’s lenders (to allow to be used by someone temporarily, on condition that) and thereby improving monetary transmission are tasks that Dr. Rajan will now leave unfinished.
Investors and markets alike will be keenly (showing a quick ; sharp)watching his successor’s approach to expediting (to perform fast and efficiently) the process, especially given Dr. Patel’s past stress on fiscal restraint (something that fastens or secures). His wide-ranging experience — he has played roles at multilateral (having my sides) lending institutions and diverse industries, including a stint (a period of time spent doing or being something) in advising on business development strategy at Reliance Industries — ought to stand him in good stead while dealing with the complexities of regulating the markets, the financial services industry and payments systems at a time of rapid technological change and disruption (a continuing act of disorder) . Dr. Patel will also have his task cut out in managing and future-proofing key cadres (the core of a managing group, or a member of such a group) at the central bank itself.
