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Below the Quote on The Assessment of RBI Governor Mr. Shaktikanta Das tenure by Dr. Manoranjan Sharma, Chief Economist at Infomerics Ratings

With Dr. Urjit Patel leaving before his tenure, Mr. Shaktikanta Das took over as the 25th Governor of the Reserve Bank of India for three years in trying circumstances in December 2018. This was a time of intense debate on the role of the RBI and its relationship with the Government of India, a relationship which is uneasy at the best of times.

As everywhere in the world, public memory in India is proverbially short. But the most well-informed watchers of the Indian BFSI (Banking, Financial Services, and Insurance) industry will recall the public spat between the then Finance Minister P. Chidambaram and the RBI Governor Dr. D. Subbarao. Chidambaram said in October 2012, "if the government has to walk alone to face the challenge of growth then, 'we will walk alone'." Strong words! To this offensive expression, Subbarao subsequently responded equally strongly, "I do hope Finance Minister Chidambaram will one day say, 'I am often frustrated by the Reserve Bank, so frustrated that I want to go for a walk, even if I have to walk alone. But thank God, the Reserve Bank exists'".

Now that the career bureaucrat-turned-central banker’s term is ending on December 10, 2024, after the second three-year extension making him the second-longest-serving RBI governor after Benegal Rama Rau, who held the position for seven and a half years in the 1950s, it’s time to assess the man and the milieu, the global overtones and the macroeconomic setting and the evolving role of the RBI in this overarching context.

Considering a proper historical and comparative perspective, Mr. Shaktikanta Das acquitted himself well at the helm of affairs in the RBI. How do I arrive at this assessment? First, he was recently named the top central banker by Global Finance for the second consecutive year in 2024, with an A+ rating for his leadership in guiding the RBI through challenging economic times. Secondly, and more importantly, his role in regulating the monetary policy, including adroitly managing the “growth-inflation trade-off” and ensuring macroeconomic and financial stability.  He also did pioneering work in strengthening the regulatory framework of Banks, NBFCs, UCBs, Payment Systems, and ARCs, deepening the supervisory framework, developing financial markets, and making the payment systems in India interoperable with cross-border linkages and innovation.

To my mind, this provides the litmus test of his astute leadership in the context of shifting paradigms and the “new normal", a normal, where there were no easy answers, a world moving through the unipolar moment that existed between the disintegration of the Soviet Union and 2016 to a multipolar homogenous system. In this grim scenario, the choices were tough and constrained and a measured and calibrated response was needed as provided by Governor Das.

He may have made some errors of judgment - who doesn’t- in the cataclysmic events of Covid-19 and geo-economic strife marked by wars in Ukraine and the Middle East. But I expect that given his role in steering India in hard and turbulent times, history will be kind and generous to him. 

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