While Urjit Patel’s exit amid increased tension between the Reserve Bank of India and the Bharatiya Janata Party-led government shocked many, the appointment of Shaktikanta Das, a retired career bureaucrat close to Finance Minister Arun Jaitley, has evoked widespread concern regarding the future autonomy of the central bank.
One of the key issues that caused Patel to call it quits was the Modi government’s pressure on the central bank to release its reserves of 3.6 trillion rupees (nearly US$50 billion), which the government wants to boost the economy in the lead-up to next year’s election. Now, all eyes are on Das to see how he deals with this crucial issue, since any misstep could conceivably undermine India’s banking system.
However, if judged by his conduct during demonetization days, he inspires little confidence. Das is an Indian Administrative Service officer who graduated in the 1980 “batch” and is currently a member of the Fifteenth Finance Commission. He also represents India at the G-20 in the role of a sherpa.
For most Indians he became a familiar face on television after the Narendra Modi government announced demonetization of high value currencies in November 2016, a policy which was slammed by many economists around the world and blamed for slowing down the country’s GDP growth.
Das, as the then economic affairs secretary, used to hold frequent press conferences to defend the government’s policy, even as the RBI remained silent and Governor Urjit Patel studiously avoided the media glare.