It was quite abrupt and newsy: the appointment of Shaktikanta Das as Governor, Reserve Bank of India. Remember his hyperactive pronouncements in the tumultuous days following demonetisation? Das was everywhere: in the news televisions, press meets and news conferences. With his suave and assured pronouncements he was the face of the finance ministry.
We have had the opportunity to move closely with Das and marvelled at his passion and intiatives.
Post-liberalisation, states were empowered to attract investments on their own terms. Till the 1990s Tamil Nadu lacked mega investments. Growth in the earlier decades had been through incremental investments. Jayalalithaa as Chief Minister, was keen to bring in a few large investments. Both Sterlite and Thapar Dupont were major showpieces, but both faced resistance in their attempts to get established in other states.
Then came the opportunity from Ford Motors. American Ambassador Frank Wisner was charmed by Jayalalithaa’s drive and the attractive incentives. Maharashtra had a better chance: Ford was already producing the Escort at the Mahindra facility at Nashik. Das used his charm to convince both Ford and Mahindra to choose Tamil Nadu. This proved a game-changer giving a big boost to the auto sector. Hyundai Motors was impressed by the concessions offered to Ford, and given the other attractions of Tamil Nadu like skilled manpower and port facilities, it set up shop here ahead of Ford. The flourish of the sector later attracted BMW, Renault–Nissan, Daimler, Saint-Gobain and several tyre companies, all with mega investments. Peugeot of France now seems to be a prospect.
We also credit Das for winning the Mahindra World City and showcasing Ennore. Today the later accounts for investments of over Rs 50,000 crore.
IE presented Das in a couple of special events. One was at the day-long seminar on Special Economic Zones in July 2007. We assembled 20 specialists headed by Commerce Secretary G K Pillai and former advisor to PM Vajpayee, Dr S Narayan. Another was an interactive session with well-known management professors K V Ramanathan of the University of Washington Business School and Bala V Balachandran of the Kellogs Graduate School. Das was accessible and willing to share his knowledge freely.
Time was when the Delhi secretariat used to have dozens of IAS officers from Tamil Nadu cadre heading several departments. Their numbers have dwindled in recent years. Also most of these men have not been gregarious and multilingual with articulation in Hindi. Das is an exception and quickly endeared himself to Prime Minister Modi and Finance Minister Jaitley through his diligent work.
The experience of inducting academics with a high degree of independence has not been palatable for policymakers. While Dr. Manmohan Singh and P Chidambaram, more familiar with western practices,were comfortable with M S Ahluwalia and Raghuram Rajan, the same has not been the case with the NDA government. In quick succession, Aravind Panagariya, Raghuram Rajan and Aravind Subramanian had moved out.
Das is familiar with the fiscal needs of the government. In our previous issue, we pointed to the finances of the Centre not in great shape. Revenue flows have been far below targets as also are targeted proceeds from disinvestments. Trade deficits are ballooning with imports rising and exports not to the mark. Banks continue to groan under NPAs. Add to these the clamour for the waiver of farm loans granted by newly elected governments in states. As if these problems are not sufficient, Das will also have to manage the RBI Board, in particular S Gurumurthy, norms with the latter’s demand for relaxation of credit norms to MSMEs and NBFCs.
Will Das come out in glory in this assignment as well? Will he assert his independence in a near-autonomous institution?
Our best wishes.
