Letter to BS: Resignation of Urjit Patel hasn't shaken govt either

This refers to “Bimal Jalan led committee to decide on RBI reserve transfer” (December 27). The move by the government is definitely a step forward to achieve the objective of fund transfer from the Reserve Bank of India (RBI). While the RBI is in no mood to lose its grip on financial stability by having a comfortable margin of reserves of assets to face any calamity in the future, the government is not keen on listening to its advice. The resignation of Urjit Patel hasn’t shaken the government either. The failure of the government to achieve the target of fiscal deficit may be one reason. Apart from this, the government is not worried about the prospect of rating agencies giving a possible downgrade. 

The government must think twice before taking this step as it will open a Pandora’s box and may affect the reputation of the RBI and the government itself. Falling crude oil prices is already a boon for the government helping them reduce the fiscal deficit. Funding of public sector banks should not be a priority at the cost of losing reputation.

Partha Sarathi Mukhopadhyay, Nagpur

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