Princeton-educated, consensus builder Sanjay Malhotra appointed new RBI Guv

A computer science engineer and master's in public policy from Princeton University, Sanjay Malhotra, the new Governor of the Reserve Bank of India (RBI), is a known consensus builder and the person instrumental in the implementation of the new income tax regime.

Malhotra, 56, is currently the Revenue Secretary in the Ministry of Finance and will succeed Shaktikanta Das, whose second three-year term comes to an end on December 10. 

 

Malhotra, who has more than three decades of experience in public policy with expertise in areas like power, finance and taxation, takes guard at the central bank at a time when the economy is faced with the dual challenge of slowing growth rate and high inflation rate.

While Das kept benchmark interest rates unchanged for almost two years in a bid to control inflation, the incoming Governor is said to be a team player who believes prices cannot be managed by the central bank alone and the task needs government help as well. 

 

He takes over as the 26th Governor of the central bank at a time when the RBI is under pressure to cut interest rates to support growth. The GDP growth slowed to a seven-quarter low of 5.4 per cent in July-September while the inflation rate accelerated to a 14-month high of 6.21 per cent in October. The government-mandated inflation target for the RBI is 4 per cent, plus or minus two percentage points.

Finance Minister Nirmala Sitharaman and Commerce and Industry Minister Piyush Goyal have in recent weeks pressed the RBI to cut interest rates as high borrowing costs were hurting the economy.

Malhotra is believed to enjoy excellent relations with the Finance Minister, which could help align monetary and fiscal policies to the needs of the economy.

Hailing from Rajasthan, Malhotra is a 1990-batch IAS officer from the same state cadre.

A computer science engineer from the prestigious Indian Institute of Technology (IIT) Kanpur and a Master's in Public Policy from Princeton University, USA, Malhotra served in different departments in the home state before coming to the Centre in 2000 as the PS to a Union Minister.

He went back to Rajasthan in 2003 and worked in departments of mines and minerals, information and broadcasting, finance, energy, and commercial taxation before coming to the Centre again in 2020 as Additional Secretary in the Union Ministry of Power.

He also served as the chairman and managing director of Rural Electrification Corporation (REC) for more than a year before being appointed as the Secretary, Financial Services in the Union Finance Ministry in February 2022. He also served on the RBI board as a representative of the financial services department.

He was made the Revenue Secretary in December 2022. Implementation of the new income tax regime has been the highlight of his tenure in the department that manages both direct and indirect taxation.

Malhotra will take charge of the RBI for a three-year term from December 11, according to a government order.

On the direct taxation side, Malhotra's tenure has seen the new direct taxation regime giving relief to the salaried class and starting of work on simplification of the I-T Act, while on the indirect taxation front, his term witnessed clarity on taxation of online gaming under the GST, removal of the windfall tax on domestically produced crude oil and fuel exports, among others.