4 Things to Know About Sanjay Malhotra, the 26th Governor of RBI With extensive experience in various Indian government departments, Malhotra is well-versed in finance and taxation at both state and central levels
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After serving as the Governor of the Reserve Bank of India (RBI) for six years 2018 onwards, Shaktikanta Das has passed the baton to the 56-year-old career bureaucrat officer Sanjay Malhotra.
Taking the charge as the 26th RBI Governor, Malhotra comes with 33-years of experience spanning multiple government departments, having served in key positions in departments such as IT, Power, Finance, and Mines.
He is a retired Indian Administrative Service (IAS) officer of the 1990 batch from the Rajasthan cadre.
This appointment continues the recent trend of placing bureaucrats at the helm of the central bank.
Education and early career
The newly appointed RBI Governor was born on February 14, 1968 in Bikaner, Rajasthan. He holds a degree in Computer Science from the Indian Institute of Technology (IIT) Kanpur and a Master's in Public Policy from Princeton University, United States. With extensive experience in various Indian government departments, Malhotra is well-versed in finance and taxation at both state and central levels.
Bureaucratic appointments
Prior to succeeding Das, Malhotra served as Revenue Secretary in the Ministry of Finance, Secretary in the Department of Financial Services, Chairman and Managing Director of the Rural Electrification Corporation, and Additional Secretary in the Ministry of Power.
Taxation issues and country rating
Malhotra has been known for his focus on data and trying to build predictive models for government tax revenue within the federal finance ministry. He worked alongside Finance Minister Nirmala Sitharaman and took decisions on long pending taxation issues, including a contentious call to tax online gaming companies. Notably, as Revenue Secretary, he successfully led global anti-money laundering watchdog the Financial Action Task Force (FATF)'s evaluation of India, earning favorable ratings for the country.
Stance on cryptocurrency
Interestingly, Malhotra took a different approach from the RBI, which wanted to almost ban cryptocurrencies. But, under his leadership, the finance ministry aimed to bring cryptocurrencies into the mainstream by requiring virtual digital asset service providers to register with the Financial Intelligence Unit.
An unexpected appointment at a critical economic moment
Prime Minister Narendra Modi's decision to appoint Malhotra surprised many in the department. Officials described it as a "dark horse," whose appointment was like "pulling a rabbit out of the hat." Malhotra is known for staying out of the spotlight and maintaining a low profile.
Malhotra assumes office during a challenging economic period. India's GDP growth for the most recent quarter slowed to 5.4 per cent, marking its slowest pace in nearly two years. At the same time, inflation rose to 6.2 per cent in October, surpassing the RBI's target of 4 per cent, driven primarily by escalating vegetable prices. In its December review, the RBI revised its inflation projection for 2024-25 to 4.8 per cent (from 4.5 per cent) and adjusted growth forecasts downward to 6.6 per cent (from 7 per cent).
His deep experience in data analysis and predictive modeling, gained during his tenure in the finance ministry, is expected to be instrumental in tackling these challenges.
Immediate challenges
As RBI Governor, Malhotra must navigate the delicate balance between stimulating the economy and controlling inflation. His task is further complicated by global financial instability, including potential US tariff hikes on China and the ongoing war between Russia and Ukraine.
However, those who have worked with him describe Malhotra as a "hard taskmaster" with a "memory of an elephant." His deep experience in data analysis and predictive modeling, gained during his tenure in the finance ministry, is expected to be instrumental in tackling these challenges.
With a recent Goldman Sachs report highlighting Malhotra's expertise in taxation and his significant contributions to shaping India's direct and indirect tax policies, analysts believe his deep understanding of fiscal dynamics and economic strategy will play a pivotal role in shaping the RBI's monetary policy.
