17 December 2018 ~ 0 Comments

The RBI imbroglio

The Modi sarkar, also buffeted by the adverse assembly election results, wants to move on from the Urijit Patel era without delay. So barely a day after Urijit resigned as Governor of the Reserve Bank of India (RBI), the government appointed former finance secretary Shaktikanta Das as the new RBI chief. The resignation of Urijit Patel as Governor of the Reserve Bank of India (RBI) had clearly caught the government unawares, although the rift between RBI and North Block and reflected in a confrontationist stance on the part of the regulator, opposing each issue flagged by the government, had been known for some time. Apparently, the government learnt about the resignation just before Patel announced it publicly. The unrelated exit of economist Surjit Bhalla from the PM’s Economic Advisory Council has only added to the Centre’s woes. A former Economic Affairs Secretary from 2015 to 2017, Das worked closely with the central bank. He is currently a member of the Finance Commission of India, and the government’s representative at the Group of 20 summits. Modi initially brought Das into the Finance Ministry to head up the revenue department, later moving him to economic affairs, where he helped to spearhead the prime minister’s controversial demonetization drive in 2016. An affable and shy babu, his elevation to Mint Street is a calming moment for both markets and the system. But as RBI Governor he will be expected to forge an independent path, especially resisting pressure from the government to do its bidding. Patel tried to do and quit when he couldn’t carry on. Hopefully, Das’s tenure will be less stressful given his longer experience.

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