Shaktikanta Das appointment as the Governor of the Reserve Bank of India comes amid a bitter dispute about the regulator’s autonomy. He has to walk a tightrope on the issue of capital management of the Central Bank, and according to noted economist Ila Patnaik, Das is expected to find a way out to transfer the “right amount of money” to help the Government meet is financial target.
In her opinion peace in The Print, Patnaik observed that Das has to be deligent enough with the objective that credit rating agencies do not bring down India’s rating either on grounds of fiscal profligacy or on account of loss of RBI autonomy.
The task is easier said then done. More so when the Government is under pressuere to find new source of financing, with tax collection during the ongoing fiscal remaining lower than the revenue collections of the last two years.
There are two options on the table and the right thing for Das to do now is to use the “excess reserves for reducing the stock of central government debt”, Patnaik, who was a former economic advisor to the government, opined.