MUMBAI: Outgoing RBI governor Shaktikanta Das said that restoring the inflation-growth balance is the most important task ahead for his successor Sanjay Malhotra.
In his last press conference as governor, Das highlighted the importance of coordination between RBI and govt in curbing inflation. “Govt undertook a lot of supply-side measures which helped RBI check inflation. The same level of coordination continues even as I am speaking to you.”
The governor also defended RBI’s position on maintaining the status quo on rates despite slowing growth. “Growth is impacted by a multiplicity of factors, not just one factor of the repo rate,” he said.
Das – who had, at the beginning of his term, said that he would do “everything to uphold the professionalism, core values, credibility, and autonomy of RBI” – said that RBI had grown stronger as an institution in recent years.
Before demitting office, Das, in a social media post, expressed gratitude to PM Narendra Modi for the opportunity to serve, and to finance minister Nirmala Sitharaman for her constant support and backing. He also acknowledged the trust and confidence of former FM, the late Arun Jaitley, during his early days at RBI.
“The consultative approach, the flexible inflation-targeting framework, and initiatives like the Bimal Jalan Committee, which was established after I joined RBI… many things have been institutionalised. Aspects of this institution, which were not formalised earlier, have been formalised and this is adding to the strength of the economy,” he said.
Responding to a query on the market perception that bureaucrats from the finance ministry appointed to head RBI would do govt bidding, Das said: “RBI’s governor looks at things from the Reserve Bank’s perspective and the mandate given to the institution. But while fulfilling the mandate, the governor has to keep in mind the requirements of the wider economy. Decisions are a synthesis of both, and ultimately, it is a judgment call every governor makes.”
Before the press conference, Das said that during his six-year tenure, the coordination between the finance ministry and RBI has been excellent. “We’ve had excellent cooperation before, during, and after Covid, especially during the inflation spike after the Ukraine war began. Govt took supply-side measures that complemented RBI’s efforts to control inflation. This level of coordination continues to date,” he said.
Despite significant changes in the monetary policy committee – including the addition of three new external members and the absence of both Shaktikanta Das and deputy governor Michael Patra at the next meeting – the outgoing governor expressed confidence that continuity would not be an issue.