Shaktikanta Das, the new governor of the Reserve Bank of India, has had a knack for resolving conflicts in his career: from his time in the Tamil Nadu government as an IAS officer to his term as economic affairs secretary in the finance ministry.
When the stakes are high, Das manages to work with those involved and narrow down differences. This happened recently at the G-20 meeting in Buenos Aires where he was India’s sherpa.
Das carried Prime Minister Narendra Modi’s wish to include in the G-20 communique a paragraph about fugitive economic offenders—part of the government’s pursuit of businessmen like Vijay Mallya, Nirav Modi, and Mehul Chokshi who have fled India after being accused of financial crimes.
“It required a lot of work from our side to get it (the paragraph) in. The European Union had a different position on this issue and we had to explain how despite its seemingly trivial nature, it could undermine the global financial architecture,” Das had said.
Das’s skills will be needed when the RBI’s ties with the finance ministry are under stress and the financial sector has a lending crisis. Das was once asked what qualities he thought a top officer should have besides technical competence. The ability to communicate, he had underlined. Das showed that ability after the government’s demonetisation decision in 2016, holding almost daily media briefings, often on the steps of North Block.
“However you will remember, these were never unplanned. If I noticed there were some developments which needed to be commented on, I asked the minister (finance minister Arun Jaitley) and only then spoke up,” Das recalled once.
During his stint with the foreign investment promotion board in the finance ministry and later in the department of chemicals and fertilisers, where he was posted as secretary, he had demonstrated the same ability to communicate well to solve problems involving difficult conflict of interests. But he is more pleased about some of his success at the state level. “An IAS officer gets plenty of chance to do some good work and I am also very happy about some of the pioneering industrial initiatives one worked on in Tamil Nadu”, he said once.
He enjoys the confidence of Jaitley and that of Prime Minister Narendra Modi. He was among the select officers who were part of the team that planned demonetisation since March 2016. Das is aware that he was linked strongly with the demonetisation exercise and in interviews was keen to clarify his role.
Das, as RBI governor, will certainly have views on monetary and fiscal issues, having worked for years as additional secretary (budget) and as, secretary (economic affairs). He is more likely to follow in the footsteps of Bimal Jalan, managing crises instead of taking dogmatic positions like YV Reddy and more recently Urjit Patel.
He hasn't been ambiguous in saying that the sequencing of reforms under the present government has been right. “The growth slowdown is short term because of the huge range of structural changes brought about in the economy, in a very short time frame”. Also banks need to lend. Banks need to lend. They cannot offer the excuse of NPAs (non-performing asset) to shut off lending”.