Sanjay Malhotra is the first Reserve Bank of India (RBI) governor since Duvvuri Subbarao to transition directly from North Block, where the finance ministry is located. Malhotra will assume office on Wednesday.
A 1990-batch Indian Administrative Service officer from the Rajasthan cadre, Malhotra will succeed Shaktikanta Das, who retired as finance secretary before becoming India's G20 Sherpa. Subbarao was the finance secretary immediately before taking over as RBI governor.
Malhotra takes office at a time when headline retail inflation has shot up to 6.2 per cent, above the monetary policy committee's (MPC's) tolerance band, while India's gross domestic product growth slowed to 5.4 per cent for the July-September quarter. Consequently, in the December monetary policy review, the RBI raised its inflation projection for 2024-25 to 4.8 per cent from 4.5 per cent and reduced the growth forecast to 6.6 per cent from 7 per cent.
What will Malhotra prioritise: Growth or inflation?
At this juncture, the key question is whether Malhotra will prioritise growth or inflation. Many believe the December policy sets the stage for a rate cut in the next review. Two of the three external members of the MPC voted for a 25-basis point (bp) rate reduction in the December meeting.
This story is from the December 11, 2024 edition of Business Standard.
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This story is from the December 11, 2024 edition of Business Standard.
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