MINT FRESH

Sanjay Malhotra, the new RBI Governor, brings a fresh pair of eyes to the ongoing growth versus inflation debate

- SURABHI & TEENA JAIN KAUSHAL

KEEPING UP WITH its preference of appointing a top finance ministry official to helm the country's central bank, the government has appointed former Revenue Secretary Sanjay Malhotra as the 26th Governor of the Reserve Bank of India (RBI).

Malhotra, a 1990-batch Indian Administrative Service officer, has taken over from Shaktikanta Das, who was among the longest-serving RBI Governors.

The thinking seems to be that an officer from North Block who is appointed at Mint Street would lend a more sympathetic ear to the government's concerns. Malhotra's appointment comes at a critical juncture when the government is hoping for a rate cut to jump-start economic growth that slowed to a lower-than-anticipated 5.4% in the second quarter of financial year 2024-25. Gross domestic product (GDP) is now widely seen to grow at a lower rate in the current fiscal than the previously estimated 7%.

Until now, the RBI's Monetary Policy Committee, which Malhotra will now chair, has stuck to its goal of inflation targeting and bringing the stubbornly high retail inflation within its tolerance band of 2% to 6%. Das, in his last media interaction as Governor, underlined that growth is impacted by a multiplicity of factors, not just the repo rate. The very next day, Malhotra, in his first address as RBI Governor, listed out "stability, trust, and growth" as the core focus of the RBI while underlining that India's growth trajectory must continue and RBI will play a key role in fostering it.