New Delhi, Dec 9: Shaktikanta Das, poised to depart as the Governor of the Reserve Bank of India on Tuesday, played a pivotal role in orchestrating and executing the demonetisation initiative as well as the launch of the historic Goods and Services Tax (GST). At the RBI, he guided India’s monetary policy during the challenging times brought about by the pandemic.
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At 67, Das, a seasoned bureaucrat, was appointed as the RBI Governor following the abrupt resignation of Urjit Patel in December 2018. His second three-year term concludes on December 10, and he will be succeeded by Sanjay Malhotra, the Revenue Secretary in the Union Ministry of Finance.
A 1980-batch IAS officer from the Tamil Nadu cadre, Das holds a master’s degree in history from St Stephen’s College in Delhi and a postgraduate degree in public administration from the University of Birmingham. He was serving as the Secretary for Economic Affairs when the government made the sudden decision to demonetise high-value currency notes in November 2016.
While the government defended the demonetisation as a measure to tackle black money, corruption, and the funding of terrorism, it faced widespread criticism for the difficulties experienced by ordinary citizens. Das, however, stood by the decision and led the efforts to normalise the situation in the following weeks.
He was also instrumental in unifying multiple indirect taxes into the GST, which took effect on July 1, 2017, coordinating with states to ensure effective implementation.
As RBI Governor, Das prioritized financial stability, controlling inflation, and fostering economic growth. He initiated several measures to alleviate the liquidity crunch in the non-banking financial sector and reinforced the regulatory framework for banks and NBFCs. Notably, his tenure was marked by the central bank’s proactive strategies to mitigate the economic ramifications of the Covid-19 pandemic.
Under his guidance, the RBI introduced various regulatory relaxations to bolster the economy and maintained benchmark interest rates for almost two years to combat inflation, delivering the final monetary policy announcement of his tenure on December 6.
“In the past few years, we have navigated one of the most challenging times in both the Indian and global economies. It has been a period of continuous upheaval,” Das remarked while announcing the monetary policy on December 6.
“As a nation, we can take pride in the fact that the Indian economy not only successfully weathered this storm but emerged more resilient. As we collectively pursue the goal of transforming India into a developed nation, I recall my words from February 8, 2023, quoting Netaji Subhas Chandra Bose: ‘…never lose your faith in the destiny of India’,” he added.
After assuming office at Mint Street, Das quickly restored market confidence, shaken by Patel’s unexpected resignation amid disputes between the RBI and the government regarding surplus transfers.
He not only alleviated market concerns but also skillfully navigated the complexities related to the surplus transfer to the government.
Just a year into Das’s governorship, the world was struck by Covid-19. As a leading economic figure, he faced the formidable challenge of managing the disruptions brought on by lockdowns. He opted to reduce the policy repo rate to an unprecedented 4 percent, maintaining a low-interest-rate environment for nearly two years to assist an economy severely impacted by the pandemic.
As the economy started to recover from COVID-19, the Monetary Policy Committee (MPC) under Das’s leadership promptly raised interest rates in May 2022 to avert overheating and control inflation.
His adept management of complex monetary challenges, along with efforts to curb inflation and foster growth, earned him a reappointment, with the government extending his term for another three years in 2021.
Das played a crucial role in ensuring that economic growth averaged over 7 percent during the last four years of his six-year term.
Throughout his tenure, his governance aligned with the expectations of the Narendra Modi administration for an RBI chief, a stark contrast to the previous terms of Raghuram Rajan and Urjit Patel, which were characterized by ongoing tensions between the RBI and the Ministry of Finance.
Since taking office, the subject of RBI autonomy has not dominated headlines. Das has been articulate, approachable, and a consensus builder, keeping communication open with the authorities in Delhi.
Earlier this year, the central bank reported a record dividend payout of Rs 2.11 lakh crore.
Prior to his role at the RBI, Das led Prime Minister Narendra Modi’s 2016 demonetisation efforts while Urjit Patel remained largely on the sidelines.
The stability of the financial system was a top priority, with Das closely monitoring extreme fluctuations in various sectors and taking preemptive measures when necessary.
As a 1980 batch IAS officer, Das previously served as Secretary of the Department of Revenue and the Department of Economic Affairs. Following his retirement, he was appointed as a member of the 15th Finance Commission and as India’s G20 Sherpa.
With 38 years of extensive experience in governance, Das has held significant positions in both central and state governments covering Finance, Taxation, Industries, Infrastructure, and more.
During his lengthy tenure in the Finance Ministry, he was directly involved in drafting eight Union Budgets.
Das holds a postgraduate degree from St Stephen’s College, Delhi University. (Agencies)
