Dilli Ka Babu: The RBI imbroglio

Columnist  | Dilip Cherian

Opinion, Oped

Though an all-India service, the Indian Postal Service (IPoS) does not enjoy the profile of the IAS, IFS and IPS services in Indian bureaucracy.

RBI governor Shaktikanta Das

The Modi Sarkar, also buffeted by the adverse Assembly election results, wants to move on from the Urijit Patel era without delay. So barely a day after Mr Patel resigned as governor of the Reserve Bank of India (RBI), the government appointed former finance secretary Shaktikanta Das as the new RBI chief.

The resignation of Mr Patel as governor of the Reserve Bank of India (RBI) had clearly caught the government unawares, although the rift between the RBI and North Block, and reflected in a confrontationist stance on the part of the regulator opposing each issue flagged by the government had been known for sometime. Apparently, the government learnt about the resignation just before Patel announced it publicly.

PM Modi initially brought Mr Das into the finance ministry to head up the revenue department, later moving him to economic affairs, where he helped to spearhead the Prime Minister's controversial demonetisation drive in 2016. An affable and shy babu, his elevation to Mint Street is a calming moment. But as RBI governor, he will be expected to forge an independent path, especially resisting pressure from the government to do its bidding. Mr Patel tried to do and quit when he couldn't carry on. Hopefully, Mr Das's tenure will be less stressful given his longer experience.

A key appointment
The Modi Sarkar has named Krishnamurthy Subramanian, a professor at the Indian School of Business, as the new chief economic adviser to the finance minister. The post had been lying vacant since Arvind Subramanian left the Finance Ministry in August at the end of his four-year tenure.

Although only about six months remain of the Modi sarkar’s tenure, this was a key appointment that the government had to fill soon. So, Mr K. Subramanian’s appointment comes a couple of months ahead of the interim budget, where the Modi-led NDA is expected to outline its vision for further reforms and inclusive growth.

According to sources, Mr K. Subramanian’s name was suggested by a search committee headed by former Reserve Bank of India (RBI) governor, Bimal Jalan. Poonam Gupta, lead economist at the World Bank, and Sajjid Chinoy, chief economist at JP Morgan, were reportedly among the other contenders. It has been hinted that Mr K. Subramanian was among those economists who came out in defence of demonetisation, a factor that may have made an impression on the government. Of course, he has the right credentials for the post. He is a PhD from Chicago-Booth and a top-ranking IIT-IIM alumnus and is seen as one of the world’s leading experts in banking, corporate governance and economic policy.

Low-key comeback
Though an all-India service, the Indian Postal Service (IPoS) does not enjoy the profile of the IAS, IFS and IPS services in Indian bureaucracy. It was a crucial service in the era when post offices played a significant role in the nation’s affairs. But since then it had slipped down the pecking order. Until now.

Of late the IPoS has been staging a quiet comeback, and the recent appointment of Arvind Saxena as chairman of the Union Public Service Commission (UPSC) has brought the focus back on one of the oldest “A” category central civil services. But there have been salient exceptions earlier too. While Mr Saxena is the first IPoS officer to be appointed as the UPSC chairman, another officer from the cadre, I.M.G. Khan, is a member of the UPSC.

Observers note that while the service has a relatively low-profile, several stalwarts from IPoS have occupied important positions in the Central government ministries from time to time. Few know that former R&AW chief Vikram Sood, and former special secretary, Cabinet Secretariat, Tilak Devasher, also served in the service.