10-Dec-2024, 02:14 PM
Shaktikanta Das, the outgoing Governor of the Reserve Bank of India (RBI), has identified controlling inflation as the most significant challenge for his successor. In his final press conference on December 10, 2024, Das emphasized that restoring the balance between inflation and economic growth is crucial for the central bank moving forward. He noted that the complexities of the current global economic landscape require a nuanced approach to monetary policy.Das’s tenure, which began in December 2018, was marked by various economic challenges, including the COVID-19 pandemic and its aftermath. During this period, he implemented measures to support economic recovery, such as reducing the policy repo rate to an unprecedented low of 4% to stimulate growth.
However, as the economy began to recover, inflationary pressures emerged, prompting the RBI to initiate interest rate hikes starting in May 2022. This balancing act between fostering growth and controlling inflation has been a defining aspect of Das’s leadership.In his remarks, Das highlighted that while managing inflation is critical, it is not the sole factor influencing economic growth. He stated that growth is impacted by a multitude of factors beyond just monetary policy decisions. The RBI’s approach has been to make monetary policy as appropriate as possible based on prevailing economic conditions and forecasts.Das also acknowledged the importance of coordination between the RBI and the finance ministry during his tenure.
He expressed gratitude for the support he received from Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi, noting that their collaboration was instrumental in navigating various challenges over the years. This partnership was particularly vital during times of crisis, allowing for a cohesive response to economic disruptions.Looking ahead, Das urged his successor, Sanjay Malhotra, to remain vigilant in addressing emerging challenges such as cybersecurity threats and technological advancements in finance.
He underscored that adapting to these changes will be essential for maintaining financial stability in an increasingly interconnected world.As Das prepares to step down after six years in office, he leaves behind a legacy characterized by a commitment to balancing inflation control with economic growth. His insights into the complexities of monetary policy will serve as a guiding framework for Malhotra as he takes on this critical role at a time when managing inflation remains a pressing concern for India’s economy. The new governor’s ability to navigate these challenges will be pivotal in shaping India’s economic landscape in the coming years.
