"The last instalment of this column decried the government’s turn toward trade protectionism, abandoning a quarter century’s commitment to trade liberalization (or, at a minimum, not sliding back into protectionism). If one harboured the hope that this was the only domain in which slippage was evident, one would be sadly mistaken.
There are early warning signs that the Narendra Modi-led government is starting to turn the screws on the Reserve Bank of India (RBI) and its governor, Urjit Patel. After the departure of NITI Aayog vice-chairman Arvind Panagariya last year, and chief economic adviser Arvind Subramanian earlier this year, Patel is, quite literally, the last man standing—by which I mean the last credible and serious US-educated economist operating within the system. Patel, who holds a doctorate in economics from Yale University, where his supervisors included the noted macroeconomist Willem Buiter and well-known trade economist T.N. Srinivasan, is by any measure one of the world’s top central bankers. And, latterly, after the dust has settled on demonetization, he has amply demonstrated his independence and refusal to buckle under pressure from the government, whether on interest rate policy or the functioning of the bankruptcy procedure. Clearly, the mandarins in North Block are not happy—nor are their political masters in South Block."
Read the full article here.