Former RBI governor Shaktikanta Das appointed Principal Secretary-2 to PM Modi

With long tenures at both the North Block and the RBI, Das has a good grasp of not just the regulatory aspects of the financial markets but also of the trade-offs involved in balancing the government’s growth objectives with the need to keep prices under check.

He was the only RBI Governor, besides Bimal Jalan, to have a six-year tenure (his term ended December 2024), and had earlier served in various capacities in the Ministry of Finance, including as a key official in the Budget division.

A 1980-batch Tamil Nadu cadre IAS officer, Das is known as a bureaucrat who deftly handled tricky situations, transitioning well between the change of regimes from United Progressive Alliance to National Democratic Alliance in 2014.

List of Principal Secretaries to the PM and their tenure. (Source: pmindia.gov.in)

A history graduate from St. Stephen’s College in Delhi, he was the Fertilisers Secretary in 2014, before being brought to the Finance Ministry as Revenue Secretary soon after the BJP-led NDA government came to power. He was named the Economic Affairs Secretary in August 2015 and remained so till his retirement in May 2017.

As Secretary, Economic Affairs, he was entrusted with the task of overseeing the re-monetisation of the economy after the shock decision to withdraw 86 per cent of the currency in circulation in November 2016. Das had then become the face of demonetisation for the government, holding almost daily briefings in Delhi.

Upon his retirement from government, he was appointed as a member of the 15th Finance Commission and as the G20 Sherpa in May 2017.

Das’s appointment as RBI governor came under challenging times, following Urjit Patel’s sudden and unexpected resignation as the RBI Governor citing personal reasons in December 2018. While Das started on a quiet note, the Covid-19 pandemic forced him to change the dynamics of central banking. During the pandemic, Das reduced the repo rate by 125 basis points to revive the economy and offered a loan moratorium and restructuring package to corporates to mitigate the adverse impact of the pandemic.

Despite a 250 basis points hike in the repo rate – the key policy rate, between May 2022 and February 8, 2023, consumer price index-based (CPI) inflation continued to remain elevated and above the RBI’s comfort zone of 2-6 per cent, as mandated by the government. In his last policy review on December 6, 2024, the RBI kept the Repo rate, the main policy rate, unchanged at a high of 6.50 per cent amid the fall in GDP growth, squashing chances of a rate cut.

Das, who was the only Governor to get a six-year tenure after Bimal Jalan’s term ended in September 2003, was instrumental in several pathbreaking decisions and overhaul of the regulatory framework.

He steered the Indian economy through various domestic as well as geopolitical challenges, including the collapse of Infrastructure Leasing & Financial Services (IL&FS) and its impact on other non-banking financial companies (NBFCs) and the effect of Russia-Ukraine war on inflation. Das used conventional and unconventional policy measures to maintain macroeconomic and financial stability in the country.

He brought in reforms in the banking sector at a time when lenders were reeling under the worst asset quality situation. His efforts resulted in an improvement in the gross non-performing assets (GNPAs) of banks from 10.8 per cent in September 2018 to 2.8 per cent at end-March 2024.

One of his biggest challenges was to handle the pressure from the government on issues such as transfer of surplus funds to the government, restructuring of loans, infusing liquidity, and sticking to its strict default norms for resolution of bad debts in banks’ books, where the Centre has favoured a more lenient approach.

Das successfully resolved the issue of transferring surplus amount to the government as dividend soon after taking over as the Governor. His predecessor Patel had differed with the government on the issue of surplus amount. In August 2019, the RBI Board approved a transfer of Rs 1,76,051 crore to the government, including a surplus or dividend of Rs 1,23,414 crore, and a one-time transfer of excess provisions amounting to Rs 52,637 crore.