Analysis: Know what are the 'new challenges' to Shaktikanta Das, the new Governor of the Reserve Bank?
Wednesday - December 19, 2018 11:39 am ,
Category : WTN SPECIAL
Shaktikanta Das to be aware in 'every front'
Reserve Bank's 'autonomy' to be the 'toughest challenge' to the new RBI governor Das
DEC 19 (WTN) - Following the resignation of Reserve Bank Governor Urjit Patel, the world's largest democracy and the third largest economy’s central bank is now headed by the former Finance Secretary Shaktikanta Das. Recently, Urjit Patel resigned as RBI governor post because of RBI's autonomy controversy with the government, after which the government had to face considerable criticism. The Central Government too is not late in choosing the new governor of the Reserve Bank and handed over the command of the Reserve Bank to the former Finance Secretary and the retired IAS officer Shaktikanta Das.
Das had played an important role in the implementation of important economic decisions like Modi's ambitious demonetization and GST. After being retired, Das was serving as a member of the Central Government Finance Commission; in such a way, helping in the implementation of demonetization and GST, Modi Government gave him responsibility of the Governor of the Reserve Bank of India. But it seems that the new governor of the Reserve Bank will have to face a lot of challenges. Let's describe you what these challenges are?
Urjit Patel resigned from the RBI governor's post on the controversy of autonomy of Reserve Bank, in this way; the biggest challenge to the new governor of the Reserve Bank is the autonomy and credibility of Reserve Bank. It’s hope that Das will try to keep the central bank's autonomy retained as soon as possible by eliminating the ongoing tension between the central government and the Reserve Bank.
In the whole world, the central banks of different countries play an important role in respective countries, and being autonomous by their governments is considered to be the most important and ideal situation for central banks. In such a case, the biggest challenge before the Das is to maintain the autonomy of the Reserve Bank.
For your information, let you know that the governors of the Reserve Bank of India be appointed for three years and sometimes their job is extended and extension depended on to the governor's work and credentials. Earlier, the Central Government didn’t extend the tenure of Raghuram Rajan, while Urjit Patel resigned while referring to personal reasons during the intervening period.
The challenge now before the ruling RBI governor das will be that he has to maintain good co-ordination with the central government while maintaining the credibility of the Reserve Bank during his three-year tenure. At the same time, a major challenge to the Das will come after the Lok Sabha elections, because if the Modi government changed after the election, it would be difficult for him to reconcile with the new government because he was in the supporters of the demonetization.
There has been debate over the reforms in the RBI for a long time. Former governors have opposed the change in the Reserve Bank. For your information, let you know that for the past few years, the central bank has tightened its policies in the banking sector in the country. Due to this, the borrowing and giving loans to the government banks in the country have become extremely difficult.
It is to be seen that according to the Central Government's intention, whether the new governor of the Reserve Bank will co-ordinate with the intention of a change in the RBI. There is also a serious non-Performing Asset (NPA) of banks, a major challenge to the Shastikanta Das. Implementing policies of NPA reforms in banks and reducing NPAs are also a major challenge to the new governor of the Reserve Bank.
Lok Sabha elections will be held after the next few months. In such a situation, inflation is a big issue for the central government. The central government will have the intention that the new governor of the Reserve Bank, Das, should control inflation. Therefore, while assuming inflation an important basis, the central bank has to set its policies.
Now, since the price of crude oil is increasing once the OPEC and Russia have announced reduction in crude oil production, then the challenge to the RBI will be to control inflation in the face of rising prices of oil.
India's economy is one of the biggest economies of the world, but from time to time, the Indian economy has been affected by global and domestic reasons.
In keeping with the autonomy and monetary policy, the new governor of the Reserve Bank, Das will have to move forward the country's economy, keeping in view the current domestic economic situation and global challenges. Das will have to try to make a friendly atmosphere of the country and send the message to the entire world's companies that it is easy to do business in India. In addition to global companies, there will be the challenge to make accessible and easy policies for domestic companies too for Das.
Considering the elections, strengthening the financial position of the banks after the announcement of farmers' loan waiver by political parties is also a big challenge for the Reserve Bank's new governor. Many economists of the country have opposed the farmers' loan waiver, in such a case it is necessary to watch whether Shanktikanta Das can secure the strength of the banks among the challenges of farmers’ loan waiver.
DEC 19 (WTN) - Following the resignation of Reserve Bank Governor Urjit Patel, the world's largest democracy and the third largest economy’s central bank is now headed by the former Finance Secretary Shaktikanta Das. Recently, Urjit Patel resigned as RBI governor post because of RBI's autonomy controversy with the government, after which the government had to face considerable criticism. The Central Government too is not late in choosing the new governor of the Reserve Bank and handed over the command of the Reserve Bank to the former Finance Secretary and the retired IAS officer Shaktikanta Das.
Das had played an important role in the implementation of important economic decisions like Modi's ambitious demonetization and GST. After being retired, Das was serving as a member of the Central Government Finance Commission; in such a way, helping in the implementation of demonetization and GST, Modi Government gave him responsibility of the Governor of the Reserve Bank of India. But it seems that the new governor of the Reserve Bank will have to face a lot of challenges. Let's describe you what these challenges are?
Urjit Patel resigned from the RBI governor's post on the controversy of autonomy of Reserve Bank, in this way; the biggest challenge to the new governor of the Reserve Bank is the autonomy and credibility of Reserve Bank. It’s hope that Das will try to keep the central bank's autonomy retained as soon as possible by eliminating the ongoing tension between the central government and the Reserve Bank.
In the whole world, the central banks of different countries play an important role in respective countries, and being autonomous by their governments is considered to be the most important and ideal situation for central banks. In such a case, the biggest challenge before the Das is to maintain the autonomy of the Reserve Bank.
For your information, let you know that the governors of the Reserve Bank of India be appointed for three years and sometimes their job is extended and extension depended on to the governor's work and credentials. Earlier, the Central Government didn’t extend the tenure of Raghuram Rajan, while Urjit Patel resigned while referring to personal reasons during the intervening period.
The challenge now before the ruling RBI governor das will be that he has to maintain good co-ordination with the central government while maintaining the credibility of the Reserve Bank during his three-year tenure. At the same time, a major challenge to the Das will come after the Lok Sabha elections, because if the Modi government changed after the election, it would be difficult for him to reconcile with the new government because he was in the supporters of the demonetization.
There has been debate over the reforms in the RBI for a long time. Former governors have opposed the change in the Reserve Bank. For your information, let you know that for the past few years, the central bank has tightened its policies in the banking sector in the country. Due to this, the borrowing and giving loans to the government banks in the country have become extremely difficult.
It is to be seen that according to the Central Government's intention, whether the new governor of the Reserve Bank will co-ordinate with the intention of a change in the RBI. There is also a serious non-Performing Asset (NPA) of banks, a major challenge to the Shastikanta Das. Implementing policies of NPA reforms in banks and reducing NPAs are also a major challenge to the new governor of the Reserve Bank.
Lok Sabha elections will be held after the next few months. In such a situation, inflation is a big issue for the central government. The central government will have the intention that the new governor of the Reserve Bank, Das, should control inflation. Therefore, while assuming inflation an important basis, the central bank has to set its policies.
Now, since the price of crude oil is increasing once the OPEC and Russia have announced reduction in crude oil production, then the challenge to the RBI will be to control inflation in the face of rising prices of oil.
India's economy is one of the biggest economies of the world, but from time to time, the Indian economy has been affected by global and domestic reasons.
In keeping with the autonomy and monetary policy, the new governor of the Reserve Bank, Das will have to move forward the country's economy, keeping in view the current domestic economic situation and global challenges. Das will have to try to make a friendly atmosphere of the country and send the message to the entire world's companies that it is easy to do business in India. In addition to global companies, there will be the challenge to make accessible and easy policies for domestic companies too for Das.
Considering the elections, strengthening the financial position of the banks after the announcement of farmers' loan waiver by political parties is also a big challenge for the Reserve Bank's new governor. Many economists of the country have opposed the farmers' loan waiver, in such a case it is necessary to watch whether Shanktikanta Das can secure the strength of the banks among the challenges of farmers’ loan waiver.
