Patel, who is currently Deputy Governor at the Reserve Bank of India (RBI), will take over the top job at the central bank when incumbent Raghuram Rajan demits office on September 4 after completing his term.
"He (Patel) will hopefully control inflation rate since he has experience of monetary policy," Minister of State for Finance Arjun Ram Meghwal told reporters here.
He further said, "Patel's appointment is a right decision and in the interest of the country."
Economic Affairs Secretary Shaktikanta Das, who himself was said to be in fray for the top post at the apex bank, welcomed the appointment of Patel as the 24th RBI Governor.
"With his background in monetary economics, monetary polities and his background in other fields, I am sure he will rise to the occasion and he will keep in mind the requirements of monetary policy and the inflation target that has now been laid out in the RBI Act," he said.
The government has set an inflation target of 4 per cent, plus or minus 2 per cent, while consumer price inflation soared to 6.07 per cent in July.
RBI's next monetary policy review is due on October 4.
"...he will also balance the requirement of growth which is in fact the mandate as per the amended RBI Act," Das said.
Stating that the job of the RBI governor is not just monetary policy, Das said the central bank head is also the regulator of banks and NBFCs.
"In that role he has to ensure smooth functioning of financial sector and he also has to look into flow of credit to various sectors in particular the requirement of agriculture and MSME sectors," he said.
Minister of State for Finance Santosh Kumar Gangwar hoped that Patel will do well as the RBI governor. "I believe Patel will take the economy in the right direction. Even though he is less experienced, I think he will do the job well," said.