Indian economy is resilient and robust and much better placed to overcome challenges, outgoing Reserve Bank of India Governor Shaktikanta Das said on Tuesday. In his final media interaction as governor, Das also noted in today's changing world order, central banks, including RBI, would have to remain alert and nimble.
"I think the Indian economy today is resilient and robust with the capacity to deal with global spillovers very effectively. We are much better placed today than what it was a few years ago. We are much better placed to deal with all such challenges and the inherent potential of the Indian economy to grow is very much there. I always remain optimistic about the outlook for the Indian economy," said Das.
In his parting remark, he reiterated the words of Netaji Subhas Chandra Bose he had used earlier, "never lose faith in the destiny of India."
Das demits office later today following the end of his term as RBI governor. The government had on Monday appointed Revenue Secretary Sanjay Malhotra as the 26th governor of the Reserve Bank.
During his six-year stint, the Governor had to overcome many different challenges. He not only navigated the economy through the uncertainties of Covid-19, but also ensured inflation remained fairly in check post the pandemic at a time inflation had hit record highs in many developed countries. He also had to deal with several crisis situations in the banking sector, whether it was the failure of the PMC Cooperative Bank or the troubles at Yes Bank.
He said it was teamwork at RBI that had been instrumental in getting things done and overcoming challenges.
"The teamwork in the Reserve Bank in my experience was perhaps at a very high level. I got excellent cooperation from each and every member of the RBI team. Each of my colleague did their best during the trying times of Covid even at the risk of their safety and personal health," said Das.
He also pointed that the relationship between the finance ministry and RBI during his stint had been at its best.
"We had excellent cooperation, excellent coordination before, during and after Covid, the multiple challenges that we faced, when the inflation spiked following the commencement of the war in Ukraine, the government undertook lot of supply-side measures, which helped the Reserve Bank to also check inflation. The same level of coordination continues even as I am speaking," he stressed.
Das leaves at a time CPI (consumer price index) inflation remains above the target, mainly driven by volatile food prices. India's GDP too has surprisingly slowed sharply in the second quarter. As he departs, what are the challenges that he sees ahead?
"I think, restoring the inflation-growth balance is the most important task ahead of the Reserve Bank and I am sure team RBI under the new governor will take it forward. The entire geopolitical and geoeconomic dynamic is undergoing a fast change, the world order is also changing. In this situation, it is always necessary to remain alert and agile and I am sure the RBI will certainly be at its best," he said.
He also listed cybersecurity and its associated risks as a major challenge that will have to be constantly dealt with.
"That is a big challenge for every authority, particularly for a central bank. In the last six years and earlier also, we have given lot of attention to this issue of cybersecurity and dealing with cyber threats and challenges. That is a continuing task because new challenges are emanating," Das noted.
He also applauded the pilot launch of central bank digital currency (CBDC) in the country. He feels CBDC is the future of currency. The unified lending interface (ULI) that the RBI introduced earlier this year could also be a game changer and its benefits will get harnessed fully in the near-future. Financial inclusion will also be a continuing responsibility, he added.