New Delhi: The central government appointing Sanjay Malhotra as the new RBI governor is an interesting move at a time when a “sharp decline in economic growth and accelerating inflation” has “dented the outlook” for India, reports the Financial Times.
While RBI’s ex-governor Shaktikanta Das — termed as ‘hawkish’ by the Financial Times — has been praised for not cutting interest rates and his steady regulation of the finance ministry, the report says that the central bank is under government fire for India’s GDP growth falling to the lowest in two years.
“Ministers had publicly criticised him over the RBI’s resistance to cutting interest rates amid rising inflation, which breached the central bank’s 6 per cent upper target band in October,” the report says, citing Nirmala Sitharaman’s concerns over high borrowing costs, and Piyush Goyal’s criticism of the “absolutely flawed” approach of considering rising food prices when setting interest rates.
The report also quotes a professor of economics as saying that the central government is “clearly trying to pin the blame for slowing economic growth on the central bank”.
Das’s departure, the report says, means interest rates could be cut in February or even at an unscheduled meeting before that. As ThePrint reported, Sanjay Malhotra is a career civil servant with a good relationship with Sitharaman.
FT adds that Malhotra had urged government tax officers last week to “prioritise the interests of the economy and ‘not kill the golden goose’ with excessive demands”.
The BBC reports on another issue that has put the Indian economy in a fix. With the US bringing bribery charges against the Adani Group last month, the BBC explores the implications of the accusations.
India’s clean energy goals, the BBC says, will most likely be insulated. “Charges against the Adani Group — crucial to India’s clean energy ambitions — are ‘like a passing dark cloud’, and will not meaningfully impact this momentum,” the BBC quotes a former CEO from a rival firm.
Delhi has pledged to source half its energy needs from renewable sources by 2032, and the Adani Group is slated to contribute to a tenth of that capacity, with Gautam Adani promising to invest $100 billion in India’s energy transition. According to the BBC, the group’s green energy arm is India’s largest renewable energy company.
On the other hand, the fallout within the company is already visible — major deals have fallen through, and credit rating agencies, such as Moody’s, Fitch and S&P, have all rated Adani Group companies negative. There are also concerns about how the company will finance debts, with international lenders backing away from it.
The unnamed CEO, however, tells BBC, “The “reputational and sentimental impact” will fade away in a few months, as Adani is building ‘solid, strategic assets and creating long-term value’.”
Within the green energy space, some analysts are hopeful that the accusations could help improve the sector. More money could start flowing into other green energy companies, which have been ramping up manufacturing and generating capacity within India.
Global Times has taken umbrage with the Congress’s criticism of the BJP’s handling of India-China ties. It highlights “intensified inter-party conflict”, the report says.
In a round-up of Indian media reports after the 32nd meeting of the Working Mechanism for Consultation & Coordination on China-India Border Affairs (WMCC), the Global Times says the Congress’s statements are now generating “political noise” but have no real meaning.
“The Congress’s minority status in the Indian Parliament limits its capacity to cause any substantial impact on the broader state of China-India relations,” the report says. The rhetoric is “part of a dual strategy aimed at gaining leverage in negotiations with China” and is “futile”.
(Edited by Madhurita Goswami)
Also Read: Brand Trump’s strides in Indian real estate sector & Great Nicobar Project as a ‘death sentence’