Just a day after Urjit Patel resigned from the post of governor of the Reserve Bank of India (RBI), the government appointed former economic affairs secretary Shaktikanta Das as his successor. Das has been appointed for a period of three years and is the 25th governor of the RBI.
Das’ quick appointment comes after weeks of reported tension between the government and the RBI due to disagreements over issues like prompt corrective action (PCA) for banks and transfer of excess capital to the government.
Speculation over Patel’s resignation surfaced after RBI deputy governor Viral Acharya delivered a speech back in October emphasising the need to protect the RBI’s autonomy.
Reacting to the news, Harsh Goenka, chairman, RPG Group tweeted, “#ShaktikantaDas as new RBI Governor will bring alignment, sagacity and respect to the job. Hopefully the two important engines of economic growth, Finmin and RBI will work in greater sync. After Manmohanomics, Modinomics, will his new economic theory be called
However, the decision was met with criticism from some representatives of the opposition. Congress leader Salman Aneez Soz tweeted, “Complicit in DemonetisationDisaster, we now have a yes man as @RBI Governor. If he did not advise the PM against demon, can he be trusted to protect the autonomy of RBI? We must keep our eyes open! #ShaktikantaDas”
The appointment of the governor of the RBI is based on the recommendations of the Financial Sector Regulatory Appointment Search Committee (FSRASC). The committee is headed by the Cabinet Secretary PK Sinha and includes additional principal secretary to the Prime Minister, PK Mishra. Typically, there are also three other experts on the panel but it wasn't immediately clear who were on the committee that selected Das as Patel's successor. Sources in the government did confirm that the FSRASC made their recommendations to the appointments committee of the cabinet on Tuesday to formalise Das' appointment.
The last time the FSRASC had to select a governor for the RBI in 2016, after Raghuram Rajan expressed his unavailability to continue after his term ended, the committee took nearly two months to finalise the name. As per the process, the panel invites applications from eligible candidates and based on interactions with them selects the
Das becomes the first IAS officer since D Subbarao to be made the RBI governor. He is also the first RBI governor since S Venkitaramanan, who held the position between December 22, 1990 to December 21, 1992, to not have a doctorate in economics or finance. Das is an IAS officer of 1980 Tamil Nadu cadre. He has served at the central government level as the fertiliser secretary, secretary of the department of economic
affairs and the revenue secretary. Post retirement, he became a member of the fifteenth finance commission and most recently was India's sherpa to the G20 meeting.