BUSINESS
11/12/2018 7:38 PM IST | Updated 11/12/2018 7:45 PM IST

New RBI Chief Shaktikanta Das Had Identical Defence For Demonetisation, GST

The bureaucrat was vocal in his support for Modi govt's controversial economic policies when he was the economic affairs secretary.

Hindustan Times via Getty Images
A file photo of Shaktikanta Das.

Former economic affairs secretary Shaktikanta Das was appointed the new Governor of the Reserve Bank of India (RBI) on Tuesday, a day after Urjit Patel resigned as the central bank's chief citing "personal reasons".

Das, who served as the economic affairs secretary from 2015 to 2017, worked closely with the central bank, according to The Economic Times. He is currently a member of the Finance Commission of India, and the government's representative at the Group of 20 summit, the report added.

He was also in the race to become the RBI governor in 2016, after Raghuram Rajan's term ended..

READ: Shaktikanta Das Appointed New RBI Governor

Das was tasked with defending the Narendra Modi government's most controversial financial reforms—demonetisation and GST—during his tenure. His explanation in both cases was identical: they will cause disruption for 2-3 months, but will bear fruit in the long run.

Here is what Das has said about major issues.

Demonetisation

Known for his pro-demonetisation stance, Das had said in February last year that the positive effects of demonetisation would be visible from April and the completion of remonetisation process will drive consumption going forward, reported PTI.

According to The Telegraph, it was only after the note ban was announced that Das came into the forefront as North Block decided to field him before the media every time a rule was tweaked.

He had also brushed aside queries after Patel did not make any public statement two weeks after the demonetisation, according to PTI.

When asked about RBI's delay in counting notes which were returned after demonetisation, he told The Indian Express in February 2017 that the government had realised that possibly double counting was taking place in some areas.

READ: Urjit Patel Resigns As RBI Governor, Cites Personal Reasons

"In matters like this, the RBI has to be absolutely correct. So, therefore, they are doing the physical counting of the notes. And counting of the notes has certain capacity. You don't have the facility for counting notes of this volume, you have the business-as-usual approach. This is a huge volume which has come in, so it is taking time," he was further quoted as saying.

GST

In July last year, Das was quoted as saying by The Hindu Businessline that benefits of Goods and Services Tax (GST) will become apparent in a couple of months as manufacturers and businessmen realise the advantage of input tax credit.

The same month, he also ruled out any price rise post GST and called such apprehensions "misplaced".

Electoral bonds

In another interview with The Indian Express, Das said that a limited time window for electoral bonds will help avoid the danger of them becoming a parallel currency.

He also justified the Union government's controversial decision to introduce the Electoral Bonds scheme in an interview with The Hindu Businessline, arguing that, "It is an effort to clean up political funding and discourage anonymous cash donations. Often companies or big donors want to donate by cheque but are worried that their identities will be revealed. Also, if they donate more to one political party and less to the other one, the latter may feel offended. Here, the bond will be a bearer bond and will protect the donor's identity. It can be utilised in a particular period of time, else it will lapse."

The Supreme Court is currently hearing a petition against the Electoral Bonds scheme.