Speculation over Reserve Bank Governor's future heats up after GDP miss

It's also unclear who among three senior Reserve Bank officials in MPC will be around in February, with Das' contract set to expire on December 10

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NEW DELHI: One of India's worst GDP growth misses in recent memory is suddenly adding more pressure on Reserve Bank Governor Shaktikanta Das, who still hasn't gotten an extension even though his term expires next week.

Economists are speculating over the future of Das in the wake of data showing the South Asian economy expanded 5.4 per cent from July to September, a seven-quarter low and far below the RBI's 7 per cent projection. While Das has been widely expected to extend his six-year run as governor, PM Narendra Modi's government has yet to provide clarity on his position while stepping up calls for an interest rate cut.

All but seven of 43 economists expect the central bank on Friday to hold its benchmark repurchase rate at 6.5 per cent—the level it has maintained for almost two years. India's inflation in October accelerated to a 14-month high of 6.21 per cent, largely due to surging food prices, above the upper band of the government-mandated inflation target of 4 per cent, plus or minus two percentage points.

The slowdown should be a "wake-up call for the RBI," said Radhika Piplani, an economist with DAM Capital Advisors Ltd.