December 10, 2024: New Delhi: Sanjay Malhotra, a seasoned civil servant and a Princeton graduate, has been appointed as the next governor of the Reserve Bank of India (RBI). Currently serving as Revenue Secretary, Malhotra is set to take over the helm on 11 December, following the retirement of Shaktikanta Das, who has held the position since December 2018.
Malhotra’s appointment marks a continuation of the Modi government’s preference for experienced civil servants over external economists for the top RBI post. Known for his expertise in banking, finance, and public policy, Malhotra is a 1990-batch Indian Administrative Service (IAS) officer from the Rajasthan cadre. He holds a B.Tech in Computer Science from IIT Kanpur and a Master’s in Public Policy from Princeton University.
A Trusted Partner of the Finance Ministry
Malhotra brings extensive experience and a strong rapport with Finance Minister Nirmala Sitharaman, with whom he has worked closely since joining the Department of Financial Services (DFS) in February 2022. A senior Finance Ministry official described him as a “competent officer” with a deep understanding of the financial sector, having previously served as Chairman and Managing Director of REC Ltd and held key roles in the Ministry of Power and the Rajasthan government’s energy department.
The government’s decision to appoint Malhotra reflects a shift away from appointing “outside” economists to lead the RBI, following earlier tensions with governors Raghuram Rajan and Urjit Patel during the Modi government’s first term.
Advocating Economy-First Policies
Known for his pragmatic approach, Malhotra has consistently emphasized prioritizing economic stability over short-term revenue collection. Speaking at the Directorate of Revenue Intelligence’s annual event last week, he urged tax officials to avoid practices that could harm industry and economic growth. “Do not kill the golden goose,” he remarked, underscoring the importance of balancing revenue generation with long-term economic health.
In his role as Revenue Secretary, Malhotra has also highlighted the need for stability in tax policies, stating that frequent changes in taxation could undermine certainty and investor confidence.
Challenges Ahead
As the new RBI governor, Malhotra faces a challenging economic landscape. With inflation above the central bank’s target of 4 percent and GDP growth slowing to 5.4 percent in Q2 of the current fiscal year, he will need to strike a delicate balance between controlling inflation and stimulating economic growth.
The RBI, under Shaktikanta Das, has maintained the policy repo rate at 6.5 percent since February 2023 despite calls from Commerce Minister Piyush Goyal and Finance Minister Sitharaman for lower rates to spur growth.
Malhotra’s leadership will be critical as the RBI navigates these dual imperatives while managing broader financial stability in a volatile global economic environment.
With his proven track record and deep understanding of India’s economic and financial systems, Sanjay Malhotra’s appointment signals continuity and a focus on steady, well-informed governance at the Reserve Bank of India.
