Detente In The Cold War?

The government moved swiftly and appointed former bureaucrat Shaktikanta Das as RBI governor after Urjit Patel’s abrupt resignation. But can Das stabilise the rocky relationship between the government and the RBI?

- Ashish Gupta

WHEN URJIT PATEL SUDDENLY resigned as central bank governor on December 10, many expected the move to deepen the already sharp divide between the government and the Reserve Bank of India (RBI). But before the jittery markets could react, the government moved quickly and appointed former economic affairs secretary Shaktikanta Das as the new governor to quell any concerns. Still, the question is: Can the seasoned bureaucrat stabilise the rocky relationship between the RBI and the finance ministry?

Das certainly has his job cut out. To begin with, he will have a difficult task convincing investors of the independence and credibility of the central bank. After all, the general impression is that Patel quit to protect the credibility of the RBI after a protracted feud with the finance ministry over the autonomy of the institution.