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Six days ahead of the crucial meeting of the interest rate-setting panel, the government on Tuesday appointed three external members to the reconstituted Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI).
The three external members are: Delhi School of Economics Director Ram Singh, economist Saugata Bhattacharya, and Nagesh Kumar, director and chief executive, Institute for Studies in Industrial Development (ISID). They will replace outgoing external members Jayanth Varma, Ashima Goyal, and Shashank Bhide. The RBI Act doesn’t allow reappointment of external members.
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The other three members in the six-member MPC are from within the central bank — the governor, deputy governor in charge of monetary policy, and an officer nominated by the central board of the regulator.
The external members shall hold office for a period of four years, or until further orders, whichever is earlier, with immediate effect, a notification by the Ministry of Finance said.
The new external members were selected by a six-member search-cum-selection committee headed by Cabinet Secretary T V Somanathan.
One of the new external members of the MPC, requesting anonymity, said: “It was a pleasant surprise. I came to know about my appointment through the formal press statement.”
Singh holds a PhD in economics from the Jawaharlal Nehru University and post-doctorate from the Harvard University. He has been a fellow at London School of Economics. In an article published in January 2023 on the government’s tax management strategy, Singh had written that investment-rewarding growth strategy requires reducing regulatory load on the corporate and allocating a higher share of tax revenue to fund capital expenditure to improve economic and legal infrastructure.
Kumar, prior to his position at the ISID, served as director at the United Nations Economic and Social Commission of Asia and the Pacific (UNESCAP). Kumar has also held several senior management roles in the organisation. He is a non-resident senior fellow of the Boston University Global Development Policy Center.
A PhD in economics from the Delhi School of Economics, Kumar was the director-general of the Research and Information System for Developing Countries (RIS), a policy think tank in the Ministry of External Affairs.
Bhattacharya, an economist with over 30 years of experience in economic and financial markets analysis, policy advocacy, infrastructure and project finance, consumer behaviour, is a senior fellow at the Centre for Policy Research. Prior to this, Bhattacharya was the chief economist and executive vice president at Axis Bank. Earlier, at IDFC, he worked as a specialist with the Policy Advisory Group and participated in several key committees of the Government of India, including the Prime Minister’s Task Force on Infrastructure.
He was part of the RBI’s Working Group on Monetary Policy in 2010 and the Finance Ministry Group on Estimating Foreign Savings in 2011.
The MPC meets every two months. Its next meeting, scheduled for October 7-9, assumes significance not only because it will take place against the backdrop of leading global central banks cutting rates, but also because the panel will have three new faces.
Markets will keenly watch the new members’ views on both rate and stance, particularly when there is action on this by leading central banks. The European Central Bank (ECB) did its second rate cut of the year, followed by a 50-basis point cut by the US Federal Reserve. The Bank of England and the Bank of Japan maintained status quo.
RBI Governor Shaktikanta Das has resisted change in both rate and stance, citing volatile food prices and slow progress of last-mile disinflation.
First Published: Oct 01 2024 | 9:18 PM IST
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