Ideal man to end RBI-Govt tiff, reverse economy's slowdown
New Delhi: Former bureaucrat Shaktikanta Das, who spearheaded the post-demonetisation normalisation of the economy, was Tuesday named the new governor of the Reserve Bank of India.
Das, 61, replaces Urjit Patel, who shocked the establishment and markets by announcing his exit from the central bank Monday. Das will have a three-year term, an official order said. He will be the first bureaucrat to head the central bank in almost five years. While it was widely expected that the government will name an interim RBI head during its search for Patel's replacement, the Appointments Committee of the Cabinet headed by Prime Minister Narendra Modi chose Das within a day.
In a tweet, Finance Minister Arun Jaitley said the government has "accepted the resignation of Dr Urijit Patel who resigned yesterday from the said post."
Meanwhile, Finance Secretary A N Jha said Das has wide experience in state government as well as the union government.
Das, a 1980-batch Tamil Nadu cadre IAS officer, who retired as Economic Affairs Secretary in May 2017, oversaw the re-monetisation of the economy after the shock decision to withdraw 86 per cent of the currency in circulation in November 2016.
After his retirement, he was named India's G-20 sherpa and also appointed as a member of the 15th Finance Commission.
Das, a history graduate from the prestigious St. Stephen's College in Delhi, was brought to the Finance Ministry soon after the BJP-led NDA government came to power in mid-2014 and given charge of the crucial revenue department. He was later moved to the economic affairs department, which essentially deals with monetary policy and the RBI.
While the BJP government chose an economist in Patel to head the RBI after it had denied extension to former IMF Chief Economist Raghuram Rajan for a second term in 2016, the position has once again gone to a bureaucrat. Bureaucrats have occupied the position for the most number of years. The last IAS officer to head the RBI was D Subbarao, who demitted office in September 2013. Urjit Patel, who initially appeared to have toed the government line on issues like demonetisation, had in the recent weeks clashed with the Finance Ministry over issues of liquidity, reserves of the central bank and lending norms.
The face-off led to the government invoking a never-used-before provision of the RBI Act to bring the governor to the negotiating table on these issues. Patel chose to resign four days ahead of the crucial meeting of the RBI Board where government nominee directors were expected to push the central bank on governance issues. Das will be the 25th Governor of the RBI.