As departing Governor of India's central bank quoted the new/upcoming Governor of Reserve Bank of India "As Urjit [Patel] keeps telling me, we are neither hawk nor dove. We are owl,”, it says it all. The person who spearheaded the committee to review the monetary policy framework in 2013 under aegis of Dr Rajan will now pave his way to the center and fight the Inflation vs Growth battle.
Expectation of the incumbent government is simple, impetus on growth is imperative but +- 2% from mid ranged 4% CPI till the next financial year is the major task of the Governor. Now it's a catchy situation because CPI is dependent on multiple factors which are not in the hands of the Governor. Good Monsoon, minimum leakages in remittances of services by the government, setting government's expectation, Industry's belief and push some natural and other man made factors' might or might not effect Dr. Patel's decision. It's yet to be seen.
Dr. Patel has not made any specific public comment as of now since joining RBI as Deputy Governor in 2013 and his style of working and leading the pack of intellectuals would be something to be looked and analysed upon yet. But being an insider for long has helped him to grow upto being the highest authority in the Bank.
Keeping up with Government's push would be an imminent challenge for him and he would be preparing his strategy around the same. Dr. Rajan was know to comment on various other topics which were not under his preview but will Dr. Patel follow his steps of being open to ideas across spectrum or a subtle way of being at one side would be his approach. We all are waiting for October 4, 2016 for his views on the economy in his first policy meeting.
Internal factors are just one part of the issues to be dealt with but external factors too are critical, Affects of Brexit are yet to be unleashed, China's influence on the global economy is critical, US's new President and his/her effect on the trade agreements and influence has to be analysed and Arab's surge coupled with Oil's stock accumulation and price effect is important to gauge as well.
Must say, a great throne to be at but not an easy one to be at. But we wish our new RBI head all the very best!! A silent crusader is what I assume Dr Patel is, excited to watch him unleash his thought process to make our economy bigger, better and much deeper.