Urjit Patel, current deputy governor and architect of inlfation policy for the central bank, has been appointed new governor of the Reserve Bank of India, to succeed Raghuram Rajan who has apparently decided not to seek a second term.
Patel, 52, served as RBI’s deputy governor from January 2011 and prior to it, he was advisor at the Boston Consulting Group. A Ph.D. in economics from Yale University (1990) and MPhil from Oxford (1986), he worked with IMF from 1990 to 1995.
Unlike other deputy governors, Urjit Patel has rarely appeared in public functions and the only one on record with RBI was when was asked to present awards at the Business Standard Best B-School Project for recognising the bright young talent of business schools in India in January 2015.
Here are some of his views one can glean from his speech there:
On Indian Youngsters:
“I am deeply envious of the young students that I see in front of me. They have the dreams, desire and the capability to create new business models and modern enterprises, which India critically needs at this juncture.”
“… An emphasis on entrepreneurship for solutions. To absorb a labour force that increases by about one million per month requires many more entrepreneurs, tens of thousands, if not hundreds of thousands, more.”
On Make in India:
“The “Make in India” vision/strategy is apposite and provides a much needed “focal point” to inculcate durable competitiveness in key sectors of our economy.”
On Ease of Doing Business Index:
“The stress (is) on improving India’s ranking in the “Ease of Doing Business index”. This provides a measurable gauge to determine how we progress. The repeated commitment and associated ground-level changes already taking place towards deepening “Policy-driven” governance (and less government) is mission critical in this context.
On Jan Dhan Yojana:
“The “Jan Dhan Yojana” scheme implemented almost wholly by our public sector banks, whereby 100 million bank accounts have been opened for those who were unbanked, is unequivocally a “game-changer”. It provides an unprecedented scaffolding and a spring board for meaningful financial inclusion and, concomitantly, substantial financial deepening of our economy.”
(Quoting from Pune Gyan Sangam)
“We should redefine the metric for effective lending, viz., prioritise loans to enterprises which will generate more employment.
— A call for an end to lazy banking; banks are asked to take on a proactive role in helping the common man.
— In other words, bankable labour-intensive enterprises should benefit as we go forward in this direction.”
“(i) First, a much larger number of small business loans will be encouraged rather than an overriding emphasis on very large loans per se.
(ii) Second, in the context of discussions on priority sector policy/guidelines, finance for small entrepreneurs, SMEs and employment creation may be reinforced. (RBI’s licensing policy for small finance banks has stipulated higher exposure to priority sectors.)
(iii) Third, banks may have to revisit at an opportune time (not now) in due course (that is, in the future) the individual company/group credit exposure limits, as well as sector exposures as part of their learning for the future for better risk management practices over the business cycle.
On Macroeconomic Stability:
“The hard earned macroeconomic stability provides an important backdrop for optimal decisions by all stakeholders. We have to preserve this.”
On Oil Prices:
“The dramatic fall in oil prices is a boon for us. It saves, on an annualised basis, around US$ 50 billion, roughly, one-third of our annual gross POL imports of about US$ 160 billion. This is on a back-of-the-envelope, top-line basis. Of course, there will be leakages and other set-offs. But our external situation undoubtedly improves. The welcome development enhances our disposable income (which will increase consumer demand for other goods and services), reduce input cost of our businesses (which will increase margins and help to enthuse investment demand), and aid government finances by reducing the energy subsidy burden in the budget.”
On New Terms:
“In today’s world, terms like “game-changer” and “transformative” are often used loosely, and are, therefore, more ubiquitous than warranted.”