Former finance secretary Shaktikanta has been appointed as the new governor of Reserve Bank of India. Das, a 1980 batch IAS officer from the Tamil Nadu cadre, is currently a member of the Finance Commission, and India's Sherpa at the Group of 20.
However, Das was heavily criticised for his pro-demonetisation stance and he was the most visible and vocal bureaucrat at the time Prime Minister Narendra Modi withdrew the high-value banknotes in 2016. He had also countered the concerns over the impact of demonetisation on economic growth by saying that any short-term dip in growth has been factored in. He was earlier perceived as one of the top contenders for the same position after the exit of Raghuram Rajan but Urjit Patel was selected for the top job.
Das, who had often sought a cut in interest rates as the top bureaucrat in the finance ministry, was appointed for a three-year tenure, making him the 25th governor of the 83-year-old central bank.
Das comes to the helm of affairs of the central bank at a time when a number of contentious issues persist between the RBI and the government. Crucial among these issues is the governance structure of the central bank and the size of its balance sheet.
The RBI board is scheduled to meet next on December 14 and take up the issue of governance reforms, which may give the board a larger say in the central bank’s decision making process.
The appointment Das came after Urjit Patel ended his term unexpectedly after clashing with the government over the institution’s autonomy. Patel, who is the first governor since 1990 to step down before his term ended, in a brief statement, cited “personal reasons” for the decision. Patel’s three-year term was to end in September 2019.