DNA Edit: Das capital - New RBI governor has to walk a tightrope

The new RBI governor Shaktikanta Das comes at a time when his predecessor Urjit Patel’s sudden exit has raised speculation that the apex bank’s autonomy is being compromised.

Das, a former economic affairs secretary, is perceived to be in the government’s good books. This should make his job of dealing with the Finance Ministry easy. Besides that, he should also be resolute enough to tell the government when to draw the line to maintain the autonomy and independence of the RBI.

Challenges before Das are many, especially since India’s growth has been slowing down, the currency markets are volatile and crude oil prices are heading north. His appointment has evoked mixed reactions from the industry even as the rupee slid.

However, Das’ involvement as a career bureaucrat could be the sort of experience that might come in handy in easing RBI’s tensions with the government. Let’s not forget that Das had worked closely with the central bank and oversaw PM Narendra Modi’s grand project of demonetization that led to the scrapping of high value currency notes.

He is perceived to be less hawkish than his predecessors. But his job is tricky, especially with the 2019 elections round the corner. The government is pushing the RBI to hand over more of its capital and loosen its grip on some of the vulnerable banks to ensure lending continues ahead of Lok Sabha polls next year.

One hopes that the RBI’s policies in tackling toxic assets in the banking system continue. The industry has high expectations from him — ranging from bringing down real interest rates, improving liquidity and promoting growth and employment to enhancing credit flow to the real economy, especially for MSMEs and housing.