Shaktikanta Das' 6-Year Tenure At RBI: Navigating Pandemic, Economic Recovery And More

The government has appointed Revenue Secretary Sanjay Malhotra as the successor to Shaktikanta Das, whose second three-year term concludes on December 10

The central bank held the repo rate steady in the December policy, marking the 11th consecutive time it had done so

Source : PTI

Shaktikanta Das’s journey as the governor of the Reserve Bank of India will come to an end on Tuesday after six years of shaping monetary policy. His tenure witnessed unprecedented events, including the COVID-19 pandemic and significant global challenges such as the Ukraine war and the Middle East crisis.

Das was the trusted figure the government turned to for the role after his predecessor, Urjit Patel, abruptly resigned in December 2018 following a fallout with the government over the central bank's autonomy. Throughout his tenure, Das maintained a smooth relationship with the government, except for the final few months when he had to firmly resist pressure to cut interest rates as the growth-inflation balance became increasingly unsettled after the October policy.

The central bank held the repo rate steady in the December policy, marking the 11th consecutive time it had done so. This decision came as inflation reached a 14-month high of 6.2 per cent for October, while the country's GDP slowed to a seven-quarter low of 5.4 per cent for the July-September period.

The government has appointed Revenue Secretary Sanjay Malhotra as the successor to Shaktikanta Das, whose second three-year term concludes on December 10. Malhotra is also recognised for his pivotal role as Economic Affairs Secretary during the government's decision to demonetise high-value currency notes in November 2016.

"In the last few years, we have traversed one of the most difficult periods in the history of the Indian economy, and perhaps, in the global economy also. It was a period of relentless turbulence and jolts," Das mentioned a few days ago while presenting the monetary policy for the final time as the Governor of the Reserve Bank of India.

"As a country, we can derive satisfaction that the Indian economy has not just navigated this period of trials successfully but also emerged stronger," he added.

India Emerged As The Fastest-Growing Economy

During his tenure, India emerged as the fastest-growing economy, recovering swiftly from the impact of COVID-19, thanks to strong macroeconomic fundamentals. Under his leadership, the Reserve Bank of India implemented various regulatory relaxations to support the economy during its most challenging moments. India’s foreign exchange reserves reached an all-time high of $704 billion, while the rupee remained the least volatile and strongest among its Asian counterparts despite the record dollar outflows in the last two months of his tenure.

Das prioritised financial stability and made the 4 per cent inflation target a non-negotiable goal. He implemented measures to balance inter-bank liquidity, emphasising that "persistent high inflation reduces the purchasing power of consumers and adversely affects both consumption and investment demand. The overall implication of these factors for growth is negative. Therefore, price stability is essential for sustained growth." India’s economic growth remained above 7 per cent throughout his six-year term in the last four years.

Strengthening Regulatory Framework

One key highlight of his leadership was strengthening the regulatory framework for banks and non-banking financial companies. He took decisive action against entities that failed to comply, fostering a strong culture of compliance within the sector.

“The world today is characterised by intricate complexities and profound uncertainties. As a central bank, our job is that of an anchor of stability and confidence, which would ensure that the economy achieves sustained high growth,” Das said.

Top Central Banker

The US-based Global Finance magazine recognised Das as the top central banker. A 1980-batch IAS officer from the Tamil Nadu cadre, Das holds a master’s degree in history from St. Stephen’s College, Delhi, and a postgraduate degree in public administration from the University of Birmingham.