All Eyes On Shaktikanta Das, The PM's New Principal Secy

More importantly, for the first time, a second post has been especially carved out, making the 68-year old Das the first ever Principal Secretary 2.

P K Mishra, retired IAS officer of the 1972 batch, was already serving as Principal Secretary. The trusted aide of PM Modi took charge in September 2019, replacing Nripendra Misra.

Until now, there was only one Principal Secretary to the PM. The appointee, undoudtedly one of the most important and powerful officials in the country, is supposed to head the administration of the PMO, and typically advises the PM on key issues related to domestic and foreign affairs, while helping in formulating strategies.

Sources said that Das is expected to focus on issues related to the economy and economic policies. He is likely to strengthen the link between the PMO and Finance Ministry, amid rising challenges in the domestic economic landscape. Das may also play an active role in selection of economic managers and top officials in few key roles which are linked to the economy.  

“The creation of the post of Principal Secretary 2 is a clear indication that economic and financial issues and policies will now get special attention, which until now was not the case,” an insider told The Secretariat.

The appointment is also a reflection of Modi’s trust in Das, who remained in the headlines during his stint as RBI Governor, for refusing to reduce policy rates, including the repo rate — the rate at which banks borrow from the central bank.

The frequent divergence of opinions on the issue of interest rates among the Monetary Policy Committee members under Das’ aegis last year had become a talking point for economic managers and analysts. 

Das had maintained a hawk-eye on the hydra-headed problem of inflation, even as the quarterly GDP growth rate for July-September slowed to 5.4 per cent, compared to 8.1 per cent in the corresponding period a year ago, and 6.7 per cent registered in the April-June period of the current financial year. Several policymakers blamed Das’ policies for the slowdown in economic growth rate.

India’s retail inflation based on consumer price index (CPI) in October inched upward to a 14-month high of 6.21 per cent from 5.49 in September. Food inflation rose to 10.9 per cent — the highest in 15 months.

Less than three months ago, Das was in the news when he did not get an extension as RBI Governor for a third consecutive time. Many pundits were quick to point out that the decision was based on his reluctance to reduce interest rates. “The decision to appoint Das as Principal Secretary 2 or something to this extent would have been taken much earlier,” the insider said.

Das As RBI Governor

Das took charge as RBI Governor in December 2018 after his predecessor Urjit Patel’s sudden resignation. Patel claimed that the central bank’s autonomy was in danger due to interference from the Centre.

“He (Das) took charge at a time when the trust level between the government and the RBI was at its lowest. Das was considered an outsider, without any Economics background and naturally there was noise over his appointment. But in the six years that he headed the central bank, the relationship between the government and the RBI improved without the latter compromising on any issue,” a former colleague of Das’ told The Secretariat.

As the 25th RBI Governor, Das is credited with managing the economy through several crises, including the Covid-19 pandemic and the Russia-Ukraine war. He has also been instrumental in bringing in the digital revolution in the payments area. Besides, he carefully managed the economy through the demonetisation phase in 2016-17.

Das was named the central banker of the year two times in a row by US-based Global Finance magazine. He was awarded an A+ grade in the Central Bank Report Cards 2024. The grades, which vary from A to F are awarded to governors on their dexterity in managing inflation, economic growth goals, currency stability and interest rate.

That apart, Das as Economic Affairs Secretary in the Finance Ministry during the demonetisation exercise, played a key role in communicating the government’s agenda and decisions notwithstanding the commotion during that phase.  

Meanwhile, the Department of Personnel & Training (DoPT), said in its notification said, “The Appointments Committee of the Cabinet has approved the appointment of Shri Shaktikanta Das, IAS (retired) (TN:80) as Principal Secretary 2 to Prime Minister with effect from the date he assumes office. His appointment will be co-terminus with the term of the Prime Minister or until further orders, whichever is earlier.”

Other key officials in the PMO include National Security Advisor Ajit Doval and Advisors Amit Khare and Tarun Kapoor. Das’ colleagues and team members often compare him with former cricketer Rahul Dravid, calling him Mr Dependable.

The post of Principal Secretary was originally created by the late PM Indira Gandhi. P N Haksar, retired official of the Indian Foreign Service took over as the first Principal Secretary under Gandhi.