Indian central bank governor Shaktikanta Das's future under scanner after GDP miss

Shaktikanta Das, governor of India's central bank, is under increasing pressure due to one of the country's biggest GDP growth misses in recent memory.
He has not received an extension despite his tenure ending next week.

After data showed that the Indian economy grew by 5.4 per cent from July to September, a seven-quarter low far lower than the Reserve Bank of India's 7 per cent forecast, economists have begun to speculate about Das's future.

There has been a lot of speculation that Das may stay on as governor for another six years however, the government has been mum on the matter despite mounting demands for an interest rate cut.

Following nearly two years of steady growth, the majority of 43 experts in a Bloomberg survey anticipate that the central bank will keep its benchmark rate at 6.5 per cent on Friday.

October's inflation rate of 6.21 per cent in India hit a 14-month high, driven mostly by skyrocketing food costs.

This rate is higher than the government-mandated objective of 4 per cent inflation, plus or minus two percentage points.

Radhika Piplani, an economist with Dam Capital Advisors, said the slowdown should be a "wake-up call for the RBI. The next rate decision is live for a policy action and will be keenly watched for reasons behind the GDP miss."

she added, "If the central bank doesn't ease now, it could be forced to compensate with a larger-than-expected cut in February."

The slowdown in growth has heightened the debate of whether the central bank is providing sufficient stimulus to the world's fastest-growing major economy. Especially as core inflation, which does not include energy and food price fluctuations, is low.

Both Nirmala Sitharaman, the minister of finance, and Piyush Goyal, the minister of commerce, have recently demanded lower interest rates. But Das ruled out rate cuts last month and had said lowering rates would be dangerous.

(With inputs from the agencies)