RBI economist becomes deputy governor after 28 years

RBI economist becomes deputy governor after 28 years
MUMBAI: The government has appointed Michael Debabrata Patra as deputy governor of the Reserve Bank of India in charge of monetary policy in place of Viral Acharya who stepped down in July last year. This is the first time since S S Tarapore, deputy governor between 1992-96, that an RBI official has been appointed to a position that has been traditionally filled by an external economist.

According to an announcement by the appointment committee of the Union cabinet, Patra will hold office for three years from the date of appointment.

With Patra’s entry there are three career central bankers holding the deputy governor’s position. The others are N S Vishwanathan and B P Kanungo. The other DG, M K Jain, is the former managing director of IDBI Bank. tnn

The government had sought applicants from economists for the position. Although Patra was not an applicant this time, he was considered based on his qualification.

Prior to Acharya, the position was held by Urjit Patel who was preceded by Subir Gokarn, Rakesh Mohan and Y V Reddy.

As executive director in charge of the monetary policy department, Patra was one of the six members of the monetary policy committee. Given his conservative stance on inflation, he has been considered ‘hawkish’ by economists. However, given the recent slowdown in the economy, he has voted in favour of a softer stance in recent policies.

Patra, a fellow of Harvard University where he undertook post-doctoral research in financial stability, has been adviser in charge of the monetary policy department since March 2006. He has been part of RBI’s firefighting team during many a crisis in the economy including the taper tantrums in 2013 and the global financial meltdown of 2008.

He has a PhD in economics from the Indian Institute of Technology, Mumbai. His PhD thesis was titled “The Role of Invisibles in India’s Balance of Payments: A Structural Approach”.

Acharya had quit six months before the end of his term after several clashes with the government. The flashpoint was his fiery speech in October 2018 where he warned the Centre of the “wrath of the markets” if the RBI’s independence was impinged upon.

“Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution,” Acharya had said in his speech.

In the MPC meeting in December 2019, Patra had spoke of the need to rekindle animal spirits in a business-conducive environment, highlighting the importance of close and continuous policy coordination.

“While voting for status quo in this meeting, it is important to note that headroom is available to act and arrest any further weakening of growth impulses. With this objective in the fore, I also vote for maintaining the accommodative monetary policy stance,” he had said.