Urjit Patel, the head of the Reserve Bank of India, resigns

A LITTLE LIKE buses, resignations rarely come when they should. On November 19th, when the board of the Reserve Bank of India (RBI) met in Mumbai, dozens of journalists camped out to await the scheduled explosion. For weeks the press had been full of stories about the widening gulf between the central government and the RBI. Instead, they got a damp statement promising to find a solution. Calm was restored.

It could not last. On December 10th, Urjit Patel, the bank’s governor, announced his resignation, citing “personal reasons”. This time few expected it, though with the bank’s next board meeting on December 14th, it should perhaps have been predictable. In recent months, RBI board meetings—which used to pass almost unnoticed—have become day-long battles. Board members friendly to the central government, in particular Swaminathan Gurumurthy, a firebrand Hindu nationalist journalist appointed in August, have used their roles to argue for changes to RBI policy. Mr Patel fought back. In late October, the argument spilled into the open as Viral Acharya, one of the RBI’s deputy governors, gave a speech denouncing interference with central bank independence.

The core of the argument between the bank and the government could be taken from an economics textbook. The government, facing a general election next year and a large fiscal deficit, would probably like the RBI to ease up on monetary policy. Furthermore it would like it to hand over a bigger dividend from its seigniorage profits—in effect giving this money to the government to spend. That would likely induce inflation, eventually compelling the RBI, which follows an inflation targeting framework, to tighten policy. But in the meantime, there would be a short, politically convenient economic boom. The RBI, which does not need to get re-elected, is understandably less keen on this plan.

Added to that basic story are plenty of subplots. The RBI wants to thrash India’s debt-addled public sector banks (which make up 70% of total banking assets) back into shape. The government would rather they were allowed to lend even more. Arguments swirl, too, about the regulation of private-sector banks. Kotak Mahindra Bank, one of the biggest, announced on the same day that it was going to court to stop the RBI from forcing its biggest shareholder, Uday Kotak, to divest some of his holding.

The bigger question is what all this says about Indian politics. On coming to power in 2014, the prime minister Narendra Modi, and his party the Bharatiya Janata Party (BJP), offered a combination of liberal market economics and cultural populism. But as elections near, the first part of that has broken down. In 2016 the previous governor of the RBI, Raghuram Rajan, left office at the end of a single term after relations with the government deteriorated. He now teaches in America. Earlier this year, Arvind Subramanian, the government’s chief economic advisor, also resigned and returned to America to teach. In place, people like Mr Gurumurthy have become more prominent.

According to Mr Rajan, speaking on television, the resignation—and what it says about the government’s attitudes to institutions—is something that “all Indians should be concerned about”. A sharp fall in the rupee seems to suggest that financial markets agree.