Arvind Panagariya is exactly what Modi wants in an RBI governor
He is also most likely to stick to his brief, unlike Raghuram Rajan.
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The very professorial Arvind Panagariya, incredibly soft spoken and lucid in his economic thought, has been advocating what is now commonly referred to as "Modi’s brand of economics" for more than a decade.
The vociferous, emphatic and prolific believer in market economics has fought tooth and nail to espouse an economic ideology of entrepreneurship, competition, lower interest rates, minimum government. A protégé of Professor Jagdish Bhagwati, Panagariya is everything that the Modi government would want in an RBI governor.
He is a renowned economist with a deep understanding of world markets and global economics, is an academic and a technocrat, understands the workings of government, and most importantly his understanding of India goes beyond the metropolitan cities, a criticism against outgoing RBI Governor Raghuram Rajan.
He is also most likely to stick to his brief, unlike Rajan who became a cause of discomfort to many as he chose to emerge as a voice of conscience for the nation.
Moreover as chairman, NITI Aayog, Panagariya’s contribution to policy making has been somewhat constricted due to the advisory role of the institution, while the RBI is as much about implementation as about setting the tone and tenor of policy direction. It will also require quick decision making and working with the PMO and North Block closely, something that should come easily to Panagariya.
However, it is also true that the rank of a RBI governor is equivalent to that of a cabinet secretary. Panagariya enjoys the rank of a Cabinet minister and from a pure administrative view it might be a step down but from an influence and power perspective, this is where great economic stories are scripted and implemented.
It is his deep desire to leave a legacy and contribute meaningfully and purposefully that pulled him away from academics to governance and that goal is perhaps best achieved as governor.
Moreover, this is a government that is constantly fighting the perception of a severe talent deficit, so to not tap into a powerhouse of economic ideas and experience would be detrimental for the government in the long run.
Besides, the ability to carry out the Prime Minister’s vision, while important, should not remain the only criteria for being in a position of influence and power in the government. Talent and competence should be given their place.