Shaktikanta Das: The man behind GST, note ban and monetary response during Covid

New Delhi: Shaktikanta Das, who will demit office as the Governor of the Reserve Bank of India on Tuesday, was the key man behind the planning and execution of the demonetisation drive and rollout of the landmark Goods and Services Tax (GST). At the RBI, he steered India's monetary policy response during the challenging period of the pandemic.

Das, 67, a career bureaucrat, was put into the high job of the RBI Governor when Urjit Patel abruptly resigned in December 2018. His second three-year term comes to an end on December 10 and will be replaced by Sanjay Malhotra, Revenue Secretary in the Union Ministry of Finance.

A 1980-batch Tamil Nadu cadre IAS officer, Das, who holds a master's degree in history from Delhi's St Stephen's College and a postgraduate degree in public administration from the University of Birmingham, was economic affairs secretary when the government suddenly scrapped high-value currency notes in November 2016.

While the government justified the move as aiming at curbing black money, corruption, and terrorism financing, many criticized it for the hardship it brought to the common man. Das, however, defended the decision and steered the normalisation drive over the course of the next few weeks.

He also played a key role when multiple indirect taxes were merged into one GST, which came into effect on July 1, 2017. Das was instrumental in coordinating with the states to ensure the successful implementation of the GST.

As the RBI Governor, he focused on maintaining financial stability, curbing inflation and promoting economic growth. While he took several measures to address the liquidity crunch in the non-banking financial sector and took steps to strengthen the regulatory framework for banks and non-banking financial companies, the highlight of his stint was the central bank's response to dealing with the economic impact of the Covid-19 pandemic.

The RBI provided various regulatory relaxations to support the economy. Under him, the central bank held benchmark interest rates steady for almost two years in a bid to control inflation. He delivered the final monetary policy of his tenure on December 6.

"In the last few years, we have traversed one of the most difficult periods in the history of the Indian economy, and perhaps, in the global economy also. It was a period of relentless turbulence and jolts.

"As a country, we can derive satisfaction that the Indian economy has not just navigated this period of trials successfully but also emerged stronger. As we strive together towards making India a developed economy, I recall what I had said in my statement of February 8, 2023, wherein I had quoted Netaji Subhas Chandra Bose: '...never lose your faith in the destiny of India'," Das said while unveiling the monetary policy on December 6.

Soon after taking charge of the Mint Street office, he provided confidence to the market shaken by the sudden resignation of Patel amid a tussle between RBI and the government over the issue of surplus transfer.

He not only assuaged the concerns of the market but deftly sorted out issues related to surplus transfer to the government.

Barely a year after Das took charge as the RBI governor, Covid hit the world. As a key economic policymaker, Das faced challenging times in managing the disruptions caused by the lockdown. He chose to cut the policy repo rate to a historic low of 4 per cent, continuing with the low-interest rate regime for almost two years to help the economy hit badly by lockdowns.

With the revival of the economy hit by COVID-19, the Das-headed Monetary Policy Committee (MPC) was quick to raise interest rates starting May 2022 to avoid overheating the economy and keep inflation under check.

His deft handling of difficult monetary situations, checking inflation and boosting growth earned him re-appointment. The government extended his tenure for another three years in 2021.

Das was instrumental in ensuring that economic growth remains over 7 per cent in the last 4 years of his six-year term.

His governance has always been in sync with what the Narendra Modi government wanted in an RBI chief after the successive stints of Raghuram Rajan and Urjit Patel, which were marred by constant conflicts between the RBI and the North Block, the home to the Ministry of Finance.

Not once since he took over did the issue of the RBI autonomy come up in news headlines. Das has been articulate and approachable to his colleagues and the media, and a consensus man who kept the communication channels alive with the bosses in Delhi.

Earlier this year, the central bank handed over the highest-ever dividend of Rs 2.11 lakh crore.

Before joining the RBI, he spearheaded Prime Minister Narendra Modi's 2016 demonetisation drive while then RBI Governor Urjit Patel took a backseat through the whole process.

The stability of the financial system was a key agenda, Das kept a close watch overheating in some segments as well as errant players and taking pre-emptive action wherever required.

Das, a 1980 batch IAS officer, served as the Secretary of the Department of Revenue and Department of Economic Affairs. Post-retirement, he was appointed as a Member of the 15th Finance Commission and G20 Sherpa of India.

Das has vast experience in various areas of governance in the last 38 years. He has held important positions in the central and state governments in the areas of Finance, Taxation, Industries, and Infrastructure, among others.

During his long tenure in the Ministry of Finance, he was directly associated with the preparation of as many as eight Union Budgets.

Das is a postgraduate from St Stephen’s College, Delhi University.