Shaktikanta Das: RBI's Captain Cool With Penchant For Quotable Quotes

In what proved to be his last monetary policy speech on Dec. 6, Reserve Bank of India chief Shaktikanta Das deferred slightly from tradition.Usually at the end of his bi-monthly monetary policy speeches, Das quoted Mahatma Gandhi, occasionally former President APJ Abdul Kalam. But last Friday, he remembered the radical leader of the freedom movement, Netaji Subhash Chandra Bose, when he said "never lose your faith in the destiny of India".It was almost as if the RBI governor was bidding goodbye to the reporters who were gathered at the 25th floor of the central bank’s office for the post-policy press conference. Parting ways with one final piece of wisdom that is likely reserved for veteran bureaucrats and other government functionaries. .It is possible that Das knew he was not coming back as the RBI governor after serving six years at the post. But Das never let up any indication of this, chiding reporters away from asking any questions about an extension from the government. "I am not giving you any headline and I think it is better we stick to monetary policy," he said as one reporter asked him if he had heard anything from the government.During the last six years, the former Department of Revenue secretary has faced many bouncers. These include the debt-market crisis prompted by the collapse of IL&FS, the fall of non-bank lenders like Dewan Housing Finance, SREI Infrastructure and Reliance Capital, the rescue of Lakshmi Vilas Bank, Punjab & Maharashtra Cooperative Bank and Yes Bank, the Covid crisis and rising geopolitical tensions. To say that the RBI has come out of these stresses largely unscathed would be an understatement. And the credit for that goes to the leadership at the central bank, which refused to budge under pressure, but kept a calm and cool face, much like its chief. .Shaktikanta Das Bows Out As RBI Governor After Delivering A Captain's Knock.Das leaves an RBI which is on much firmer footing than when he came in. Over these six years, the relationship between the central bank and the government it reports to have improved significantly. And this was achieved without compromising on its autonomy as a regulator.What did hurt Das toward the end of his tenure, however, was price stability. The RBI and the monetary policy committee have been at it for over two years now, trying to curb the rise in consumer price index inflation. While it has inched lower, it remains far from the target 4%.The latest monetary policy meet saw the RBI up its inflation guidance for this financial year to 4.8% from 4.5%. This is mostly guided by higher food inflation, which remains persistent. Questions have been raised from various quarters, including the chief economic adviser, if the RBI needs to bother itself with food inflation at all, since monetary policy cannot really control it.Das has been clear in his response. Even though controlling food prices is outside the central bank’s control, ignoring it can be too costly. Food inflation forms a core part of a household's inflation expectation. Persistently high food prices can unanchor inflation expectations, which may spillover into other areas, hurting broader price control efforts. .Shaktikanta Das To Raghuram Rajan: A Look At The RBI Governors During Modi Government.The voices in favour of aggressive monetary easing are rising louder. But Das and his MPC have largely remained unfazed, keeping their inflation mandate in front of all discussions. But Das could afford to go after the inflation horse (or elephant, or fish eye, depending on the speech you refer to), because India's growth remained unhindered through a majority of his tenure. Except with the latest gross-domestic-product growth print, that affordability may have been diminished.When this reporter asked why the RBI and the MPC continue to hold rates in the midst of a growth versus inflation debate, Das said better evidence is needed to act. "In the life of a central bank, there is no room for knee-jerk reaction... our effort has been to remain in line with the curve, never fall behind the curve and I think we are following that trend," he said.In the RBI's centenary decade, a new leader is taking over. Currency, inflation and growth will continue to be factors to account for. But the new RBI Governor, Sanjay Malhotra will feel confident about one thing— India's destiny, and that of the RBI, remains safe and sound. .Five Key Decisions Of Outgoing RBI Governor Shaktikanta Das

Shaktikanta Das: RBI's Captain Cool With Penchant For Quotable Quotes

Shaktikanta Das leaves a Reserve Bank of India that is on much firmer footing than when he came in.

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP