Shaktikanta Das appointed as RBI governor: Experts react to government’s decision

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government on Tuesday appointed former finance secretary Shaktikanta Das as the new governor of the Reserve Bank of India (RBI).

Earlier on Tuesday, CNBC-TV18 had reported that Das was being considered for the post that was left vacant after Urjit Patel resigned on Monday, a move that surprised the industry.

“On account of personal reasons, I have decided to step down from my current position effective immediately,” Patel had said in a statement.

Das was appointed as India’s sherpa at the recent two-day annual G20 meeting held at Buenos Aires. A former civil servant, Das is also a member of the 15th Finance Commission.

Reacting to the government’s decision of appointing Das as the RBI governor, Nilesh Shah, managing director and CEO, Envision Capital, said that the government had made an “excellent” choice and that he had all the right credentials suited for the job.

“I think his past credentials, past experience will ensure that there is compatibility with the government and ministry of finance. Of course, his new hat will require him to kind of bring about and ensure autonomy of the RBI. So, I clearly think this is a great choice and I think his top priority will be to strike right balance between autonomy as well as compatibility with the government,” he said.

While Ashok Wadhwa, group CEO, Ambit Pvt Ltd, said that the government taking a speedy decision was commendable. He said that with the decision, the government has admitted that the most important seat in the authority can not remain vacant.

“We know that sometimes the process can take very long, so clearly the market should cheer this tomorrow morning that there is a governor at the Reserve Bank of India,” said Wadhwa.

“I think he is a balanced individual. Here is the person who is very experienced, he knows exactly how the government and the bureaucracy operates. Of course he will have to be independent, demonstrate autonomy and yet demonstrate compatibility within the operating environment. I would say given the current situation perhaps one of the best choices,” he added.

Anant Narayan, professor at SP Jain Institute of Management Research, however, said that “these are not normal times” to celebrate an appointment.

“This comes at the back of very core differences between the government and the RBI and we have seen some of the issues such as raiding of the RBI’s balance sheet, relaxation of PCA norms, giving forbearance on loan recognition and so on and so forth. Now putting somebody who is close to the dispensation will raise concerns that the government might push its way through on all these issues that Urjit Patel was resisting upon,” said Narayan, adding that the autonomy of the central bank will be under question.

Citing his experience in handling the budget of the government as one of the reasons, Amitabh Kant, CEO, NITI Aayog, said that Das was the most suitable candidate for the post.

“Shaktikanta Das is a very seasoned, very matured officer. He is also very distinguished officer. He has handled the budget of government of India sort of very long time. He has been the finance secretary of government of Tamil Nadu as well and has done budget for Tamil Nadu for very long period of time. I don’t think any other officer in government of India has the experience which Shaktikanta Das has in matters of finance both at government of India and at the state level. He has also been the industry secretary of Tamil Nadu and had steered investments across the range of areas particularly in the automobile sector. So, in terms of sheer experience of finance, industry, and budget he brings in a very formidable experience,” said Kant.

“He has great ability of consensus building. He has this great ability of taking his team along and he has a great ability of working as a team leader and I have known him for a very long time from my college days. Subsequently he is from my batch of the Indian Administrative Services and let me tell you very clearly that he is an outstanding choice, immense experience, immense maturity and tremendous caliber and great team leader,” Kant added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow