Malhotra, currently serving as Revenue Secretary in the Ministry of Finance, takes over from Shaktikanta Das, whose tenure as RBI Governor began in December 2018. With an academic background in Computer Science from IIT Kanpur and a Master’s in Public Policy from Princeton University, Malhotra steps into the role during a critical period for the Indian economy.
Rajnish Kumar, former Chairperson of the State Bank of India, expressed no surprise at Malhotra’s appointment, noting a pattern of finance ministry bureaucrats transitioning to the RBI Governor role.
“I am not surprised by the appointment Sanjay Malhotra because Shaktikanta Das when he came, he also came from the economic affairs ministry with relevant experience in the finance ministry. So finance ministry bureaucrats have been in the past RBI governors. So I don’t think there is any element of surprise in it. It is the prerogative of the government who they want to post, but the pedigree is the same as of many governors of RBI in the past.” Kumar remarked.
He emphasised the consistency of the RBI’s role in guiding the financial system, stating that whoever assumes the governorship must adhere to the institution’s foundational principles, ensuring growth without excessive risk-taking.
Reflecting on Shaktikanta Das’s successful tenure despite initial scepticism about his non-economist background, HR Khan, former Deputy Governor of the RBI said, “Once you come to the Reserve Bank, you start appreciating its policies. Das’s performance, particularly during crises like COVID-19, proved critics wrong. He introduced innovations like the Innovation Hub, ULI and strengthened supervisory systems, leaving behind a rich legacy.”
Pronab Sen, former Chief Statistician, noted that while Malhotra’s appointment is significant, the real surprise lies in the government not extending Shaktikanta Das’s tenure. He attributed RBI’s policy stability to its strong internal bureaucracy, which guides governors during their initial days. “RBI’s decision-making doesn’t change much with a change in governor. The new governor usually begins asserting himself only after understanding the expectations and framework,” Sen explained.
AK Bhattacharya, Editorial Director at Business Standard, observed a clear pattern in the government’s preference for IAS officers as RBI Governors. “It is now very clear that the government is obviously more comfortable with IAS officers as their RBI governors. And the faith and the trust and the IAS officer’s ability to work in the system in which they can provide the right kind of coordination with the government and the monetary policy and fiscal policy coordination. And I think the choice has clearly fallen on an IAS officer. Secondly, this is a three-year term, so which means that Sanjay Malhotra, will be the governor for the next three years, almost close to the end of this government’s term, which is 2029. So in a sense that you have got three years of a new term, of a new governor, an IAS officer in place,” Bhattacharya said.
As Malhotra assumes the governorship, he inherits a challenging economic landscape. His tenure will demand a balance between fostering innovation, ensuring financial stability, and steering the economy through global uncertainties and domestic reforms.
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First Published: Dec 9, 2024 8:03 PM IST
