Day after Urjit Patel’s resignation, Shaktikanta Das appointed new RBI governor
The fact that Das was among the three short-listed candidates for RBI governor before Patel was finally picked up the 24th RBI governor in September 2016, also came in handy for the government.
On a day results of elections to five state assemblies exposed the vulnerability of the Narendra Modi government less than half a year before the next general elections, it named Shaktikanta Das, a tested bureaucrat perceived to be close to it, as the new governor of the Reserve Bank of India (RBI).
Das’s appointment for three years, which came within 24 hours of Urjit Patel’s resignation amid a rift between the Centre and the RBI on a host of issues including how the central bank is governed, gave credence to the notion that the government had anticipated Patel’s exit and thought of alternative arrangements.
The Appointments Committee of the Cabinet’s quick decision, without the customary rigmarole of inviting applications and interviews, demonstrated the government’s keenness to keep the pace of current deliberations over RBI’s reserves transfer policy and empowering its board.
A crucial meeting of the RBI board will take place on December 14 as scheduled.
The fact that Das was among the three short-listed candidates for RBI governor before Patel was finally picked up the 24th RBI governor in September 2016, also came in handy for the government.
Bhubaneswar-born Das, 61, belonged to the Indian Administrative Service (Tamil Nadu Cadre) for over three decades and retired as secretary, department of economic affairs in the finance ministry, in May 2017. He was noted for his articulate defense and handling of demonetisation and its aftermath in late 2016 and early 2017.
Currently, a member of the 15th Finance Commission and India’s Sherpa to G20, the comity of developed and emerging nations tasked with ensuring international financial stability, Das has rich experience in the finance ministry in different capacities, including as revenue secretary. He was a part of the seven central-budget teams during his tenure in the ministry from November 2008 up to May 2017.
While the last two RBI governors — Patel and his predecessor Raghuram Rajan — were renowned economists, the galaxy of India’s central government governors includes several bureaucrats. In recent decades, Yaga Venugopal Reddy and Duvvuri Subbarao, who respectively were the 21st and 22nd governors of the central bank, were roped in from the IAS fraternity, although both were also trained, economists. Das is perceived among his peers as an ‘upright’ bureaucrat with a style of functioning which is highly organized.
Das as RBI governor could minimize the chances of any potential conflict between the government and RBI. Experts note since the inflation-targeting framework has been adopted by the RBI and a structured Monetary Policy Committee (MPC) is in place for regular review of the monetary policy, the governor or for that matter the RBI’s executive management have to pay heed to the three non-RBI members of the six-member MPC on interest rates and policy stance.
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