Insta
“Poor Man’s Rajan” Quits As RBI’s Deputy Governor - Viral Acharya Will Return To His Lucrative Sinecure In US Academia
Swarajya Staff
Jun 24, 2019, 10:00 AM | Updated 10:00 AM IST
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
The RBI deputy governor Viral Acharya has resigned six months before the scheduled end of his term, Business Standard reported.
Acharya, who joined the RBI on January 23, 2017, for a three-year term, is rejoining New York University Stern School of Business (NYU Stern) as CV Starr Professor of Economics. in August when the new academic season is set to commence.
Acharya’s brusque and controversial speech emphasising the need for RBI’s autonomy hit the headlines in October last year and was widely viewed as tan attempt to bring out the long simmering tensions the Union government and the central bank over a host of issue including the extent of RBI’s reserves.
Delivering the AD Shroff Memorial Lecture in Mumbai, an unrestrained Acharya threw caution in to the wind and warned of the ‘potentially catastrophic’ consequences of interference on the government’s part. “Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite (an) economic fire, and come to rue the day they undermined an important regulatory institution,” he noted
In that speech, which was seen as uncharacteristically belligerent for a central banker, Acharya made pointed mention of major friction-points between the two to emphasise that the RBI is constrained by lack of autonomy in several areas. Among the issues he red-flagged was the proposal to create a separate payments regulator where the RBI will have only limited say; the other is its limited powers to discipline and act against erring public sector banks; and the third is the constant government demand for more dividends.
Drawing a cricketing analogy, Acharya claimed that the RBI is playing a test match (implying that it is in a better position to secure the economy’s long-term interests) while the government is playing T20 game (seeking additional resources in the short-term according to its political timetable).
Many observers viewed Acharya’s outburst as orchestrated on behalf of the then governor Urjit Patel, who eventually quit a few months later.
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.