At his first presser after taking charge as governor of the Reserve Bank of India (RBI), Shaktikanta Das appeared to be everything his predecessor Urjit Patel was not. Das appeared relaxed and confident considering the strained circumstances under which he was given the governor’s job, fielded most questions posed and, unlike his predecessor, chose to address the media without deputies by his side. This is in stark contrast with a typical Patel presser which used to be mostly monologues.
Patel either passed tough questions to his deputies or abruptly ended his answers without getting into the specifics. During his two and half years tenure as governor, Patel made himself visible to the public on very few occasions and spoke at even fewer ones. That won him the tag of a bad communicator and left the world to guess his thoughts. In contrast, Das came across as a man who loves to talk and take questions.
During the presser, he said he would meet Mumbai-based MD and CEOs of state-run banks tomorrow to discuss the industry issues that will be followed with meetings with other bank heads. This meeting assumes significance when at least 11 state-run banks are under RBI's prompt corrective action (PCA) and the government’s repeated demand for increased credit growth at a time when the economy is struggling on the ground and general elections are barely six months away.
Das also confirmed that the 14 December board meeting of the central bank will take place as scheduled quelling speculations that this will be postponed in the face of a change in guard in the RBI. By sticking to the date, Das seems to be giving a message to the public that he isn’t perturbed by the Patel-episode and business goes on as usual. Beyond all this, there was no fresh information in the presser.
The former economic affairs secretary avoided specific questions on contentious issues--interest rate cut, RBI-government tussle and use of RBI’s cash reserves—saying the respective committees will take a call on all these--yet again a calculated response.
The world was not looking for his responses on policy issues but an answer to the million dollar question--whether Das will be the government’s man in the RBI and side with the centre in the ongoing turf war. On this, there were three major hints from the Das presser.
Das repeatedly emphasized that while he is all for the autonomy of the central bank, there is a need for consultation with the government “which runs the country and economy”. Second, the RBI needs to be 'accountable' while enjoying its autonomy and third, while RBI’s mandate is price stability (targeting inflation), the RBI Act also says that it needs to do so “keeping in mind the objective of growth”. These are important indications that tell us that the new governor is sensitive to the government’s concerns.
Reading between the lines, Das will be a governor who will push RBI into an entity that will have to take into account the concerns of the ruling government, be ‘accountable’ to everything it does and not operate singularly focused on inflation target giving a total miss to growth concerns.
In other words, the tone and tenor of the new governor suggest that he is likely to be more sympathetic to the government’s growth concerns not just RBI’s inflation worries.
More importantly, Das isn’t a big fan of absolute autonomy of the central bank. And certainly, the new governor wouldn’t want the central bank to escalate its fight with the government for any reason. Das duly acknowledged his predecessor’s work at the end of the presser but has certainly taken the flight to Mumbai to put the Patel saga behind him.
Having said this, words don’t mean everything. We will get more clues from Das when he begins to decide on contentious issues. There is plenty on his plate. Das has hit the ground running with his meeting with PSB chiefs tomorrow. That, and the 14 December Board meeting will offer more clues on the mann ki baat of the new governor of Mint Street.
Updated Date: Dec 12, 2018 18:29:22 IST