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Informist, Monday, Dec. 9, 2024

--Govt: Revenue Secy Sanjay Malhotra to be RBI governor for 3 yrs from Wed

--CONTEXT: RBI Governor Shaktikanta Das' term ends on Tuesday

NEW DELHI - The government has named Revenue Secretary Sanjay Malhotra as governor of the Reserve Bank of India for a period of three years starting Wednesday, according to a notification issued Monday. "The Appointments Committee of the Cabinet has approved the appointment of Shri Sanjay Malhotra, IAS (RJ:1990), Secretary, Department of Revenue as Governor, Reserve Bank of India for a period of three years from 11.12.2024," the government said in notification.

Malhotra will succeed the outgoing Governor Shaktikanta Das, whose term as the central bank's top boss will end on Tuesday. On completion of his tenure, Das will have completed six full years as the head of the Indian central bank.

As Das' successor, Malhotra will also be the head of the crucial Monetary Policy Committee, which last week left the policy repo rate unchanged at 6.50% for the 11th meeting in a row. Das, along with three other members, voted to stay pat on rates even as GDP growth slid to a seven-quarter low of 5.4% in Jul-Sept. Pressure has been rising on the RBI to reduce interest rates, with Commerce Minister Piyush Goyal saying last month that the Indian central bank should reduce the repo rate and that focussing on food inflation while making interest rate decisions is a "flawed theory". The finance ministry's Economic Survey for 2023-24 (Apr-Mar), primarily authored by Chief Economic Adviser V. Anantha Nageswaran, had made a similar recommendation in July, saying food inflation should not be targeted by the RBI.

The MPC will next meet on Feb. 5-7, days after the Union Budget for FY26 will be presented by Finance Minister Nirmala Sitharaman. Malhotra will be joined at the next meeting of the rate-setting panel with another new member as Deputy Governor Michael Patra's term ends in mid-January. The government has begun the process of looking for Patra's successor.

Malhotra would have been a key architect of the upcoming Budget had he remained as revenue secretary. Under his watch as the head of the Department of Revenue, monthly Goods and Services Tax collections have gone from INR 1.5 trillion in late 2022 to averaging INR 1.8 trillion this financial year.

The incoming RBI governor is expected to maintain healthy coordination and relationship between Mint Street and New Delhi that Das is widely seen to have restored after a tumultuous few years under Urjit Patel and his predecessor Raghuram Rajan, neither of whom were career bureaucrats or central bankers.

The appointment of Malhotra as the RBI governor ends months of speculation over the future of the position, with multiple reports saying Das was likely to get an extension. Das--who was first appointed for three years two days after Urjit Patel resigned as governor on Dec. 10, 2018--has long batted away questions about his future. On Friday, the outgoing governor refused to answer questions about his future, saying he was not going to be "giving any headline" to reporters.

Malhotra, an officer of the Indian Administrative Service from the 1990 Rajasthan cadre, took charge on Dec. 1, 2022 as the revenue secretary in the Ministry of Finance. Prior to that, he was the financial services secretary from Feb. 8, 2022 to Oct. 19, 2022.

Before his two stints as a senior bureaucrat in the finance ministry, Malhotra was chairman and managing director of power-finance company REC Ltd from Nov. 9, 2020 to Feb. 8. 2022. He also served as additional secretary in the Ministry of Power, managing director of Rajasthan State Mines and Minerals Ltd., and private secretary to Minister of State in Department of Space, among other positions.

Malhotra completed his Bachelor of Technology in Computer Science and Engineering from Indian Institute of Technology-Kanpur in 1989 and Masters in public policy from Princeton University of the US.  End

Reported by Siddharth Upasani

Edited by Ashish Shirke

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