Anushruti Singh
In a critical moment for India’s economy, a seasoned technocrat is stepping up to helm the Reserve Bank of India (RBI). Sanjay Malhotra, a 56-year-old computer science engineer turned bureaucrat, brings with him a wealth of experience in public policy, taxation, and governance. Known for his consensus-building approach and pragmatic leadership, Malhotra is set to become the 26th Governor of the central bank, succeeding Shaktikanta Das, whose tenure ends on December 10.
An academic and professional trailblazer
Born and raised in Rajasthan, Malhotra’s academic journey began at the prestigious Indian Institute of Technology (IIT) Kanpur, where he earned a degree in computer science engineering. His quest for knowledge took him to Princeton University, where he obtained a Master’s in Public Policy, honing his skills in critical analysis and policymaking. These formative years laid the foundation for a career marked by strategic thinking and innovative solutions.
Joining the Indian Administrative Service (IAS) in 1990, Malhotra quickly rose through the ranks. His early postings in Rajasthan saw him take charge of departments as varied as mines and minerals, information and broadcasting, finance, and energy. Over the years, he developed expertise in areas like power, finance, and taxation, which would later define his tenure in central government roles.
Catalyst behind key economic reforms
Malhotra’s contributions to India’s financial landscape are far-reaching. As Revenue Secretary, a role he has held since December 2022, he oversaw the implementation of the new income tax regime, providing relief to salaried individuals and initiating steps to simplify the Income Tax Act. Under his leadership, clarity emerged on indirect taxation policies, including GST regulations for online gaming and the removal of windfall taxes on crude oil and fuel exports.
His tenure at the Ministry of Power, where he served as Additional Secretary, further cemented his reputation as a dynamic policymaker. He also played a transformative role as Chairman and Managing Director of the Rural Electrification Corporation (REC), driving initiatives to extend electricity to India’s remotest corners.
Malhotra’s knack for building bridges extends to his relationships with key stakeholders in government. His close working relationship with Finance Minister Nirmala Sitharaman is particularly noteworthy and is expected to facilitate greater alignment between monetary and fiscal policies under his leadership at the RBI.
Challenges on the horizon
As Malhotra steps into his new role on December 11, he inherits an economy grappling with a delicate balance. Inflation surged to a 14-month high of 6.21 per cent in October, exceeding the RBI’s upper tolerance limit of 6 per cent. Meanwhile, GDP growth slowed to 5.4 per cent in the July-September quarter, the lowest in seven quarters.
High borrowing costs have emerged as a contentious issue, with Finance Minister Sitharaman and Commerce and Industry Minister Piyush Goyal urging the RBI to consider rate cuts to spur economic growth. This places Malhotra at the center of a crucial debate: how to balance inflation control with growth revival.
His predecessor, Shaktikanta Das, maintained steady benchmark interest rates for nearly two years to contain inflationary pressures. However, Malhotra’s leadership style, marked by collaboration and pragmatism, suggests that he might explore new ways to address these challenges, potentially advocating for a stronger partnership between the RBI and the government.
Vision for inclusive growth
Malhotra’s arrival at the central bank signals a shift toward more inclusive and collaborative policymaking. His deep understanding of fiscal and monetary policy dynamics positions him to tackle systemic issues with a holistic approach. Moreover, his tenure as a representative of the financial services department on the RBI board has given him valuable insights into the institution he will now lead.
At a time when the global economic environment remains uncertain, Malhotra’s ability to navigate complex challenges will be put to the test. His focus on aligning fiscal and monetary strategies could pave the way for innovative solutions to bolster India’s economic resilience.
With a three-decade-long career rooted in public service, Malhotra brings a rare blend of technical expertise and administrative acumen to his new role. His leadership at the RBI will likely prioritise sustainable growth, inflation management, and financial stability, all while fostering trust and cooperation between the central bank and government.
As he prepares to steer India’s monetary policy in uncharted waters, the stakes are high. Yet, for someone who has consistently turned challenges into opportunities, Malhotra seems well-prepared to rise to the occasion. His appointment not only marks a new chapter for the RBI but also holds the promise of a balanced and forward-thinking approach to economic governance in India.
