The Historian Who Mastered India’s Economy

The hot seat of Reserve Bank of India’s Governor has, for the second consecutive year, been recognized as the top central banker globally by the US-based Global Finance magazine. The incumbent in this prestigious position, Shaktikanta Das, defies popular perception—not as a student of economics but as a postgraduate in history with a background in civil services.

Das, the RBI Governor, shares the top honours with Denmark’s Christian Kettel Thomsen and Switzerland’s Thomas Jordan, all receiving `A+’ ratings. These grades, based on a scale from A to F, reflect success in managing inflation control, economic growth, currency stability, and interest rate management. In 2015, then RBI Governor Raghuram Rajan became the first Indian to be recognized by the magazine. Since 1994, the Central Banker Report Cards, published annually by Global Finance, have graded the governors of 101 key nations. These awards have become a trusted standard of excellence for the global financial community.

Unlike his three immediate predecessors the 67-year-old Governor Das has maintained cordial relations without capitulating to the government’s wishes. His firm stance on cryptocurrencies and inflation, even amid increasing calls for growth, exemplifies his balanced approach.

However, Das, whose origins trace back to Odisha, has faced his share of setbacks since taking over in 2018 after the abrupt resignation of Urjit Patel. Notable challenges included the crises involving Yes Bank, Lakshmi Vilas Bank, and PMC Bank.

Despite critics blaming the RBI for the chaos surrounding these banks, Das’s leadership saw the regulator addressing each issue with tailored solutions rather than a one-size-fits-all approach.

During the pandemic, the decision to inject Rs 17 lakh crore in liquidity, with a sunset clause for withdrawal after three years, was executed seamlessly, preventing any major economic disruptions.Leaving past challenges behind, Das has successfully managed to control retail inflation, drive economic growth, maintain currency stability, and manage interest rates through a tight monetary policy. Striking a balance between inflation control and economic growth, the RBI under Das raised rates by 250 basis points, compared to 500 bps by the US Federal Reserve, ensuring both inflation control and continued growth.

Ensuring a stable currency relative to most developed nations, Das elevated governance and compliance standards for banks, increasing risk weightage and additional provisions through a counter-cyclical approach. Despite the inflation-growth dilemma, Das has kept RBI’s focus on developmental issues, with a particular emphasis on digital payments.

Congratulating Das on his achievement for the second consecutive year, Prime Minister Narendra Modi said on social media, “This is a recognition of his leadership at the RBI and his work towards ensuring economic growth and stability.”

Before assuming charge as the 25th Governor of RBI in December 2018, Das was a member of the 15th Finance Commission and India’s G20 Sherpa. With nearly four decades of experience in various areas of governance, he has held several key positions in finance, taxation, industries, and infrastructure. Das played a pivotal role in negotiating the GST framework, including the five-year compensation plan for states, and devised the constitutional amendment for its implementation. He also played a crucial role in negotiating tax evader information sharing with the Swiss government, drafting the Insolvency & Bankruptcy Code, outlining the Fugitive Economic Offenders Bill, and formulating laws on overseas black money.

Having worked under three different finance ministers—Pranab Mukherjee, P. Chidambaram, and Arun Jaitley—Das was directly involved in preparing eight Union Budgets and served as India’s alternate governor in the World Bank, Asian Development Bank, New Development Bank, and Asian Infrastructure Investment Bank.