Moneycontrol Pro Panorama | What tilted the scales in Shaktikanta Das’ favour?

RBI Governor Shaktikanta Das (file image)

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The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

The government has voted for continuity in the Reserve Bank of India. It has reappointed Governor Shaktikanta Das for three more years after his tenure ends mid December 2021.

It was an eventful tenure even without the pandemic. The IL&FS crisis, the DHFL fiasco, the fall of PMC Bank, Yes Bank’s shotgun bailout, the merger of Laxmi Vilas Bank all happened during the past three years.

The RBI handled the pandemic relatively well. There were no sudden shocks or disruptions to the market. As the Centre’s fiscal situation deteriorated, the RBI had to manage record high borrowings as well.

Perhaps, what counted in Das’ favour ultimately was that he smoothly managed the central bank’s relationship with the government. It has been a frictionless relationship so far and that’s probably why the government announced his reappointment well before the end of his term.

All said, as the pandemic ebbs, the politics of central bank appointments becomes interesting again what with BundesBank president Jens Weidmann resigning unexpectedly and US Federal Reserve Chair Jerome Powell’s term ending in February.

We wish the governor the best and request him to also focus on improving RBI’s Database on Indian Economy (DBIE) which seems to see more outages than power cuts in rural India.

The other big news of the day is IRCTC. After the Railways ministry ordered IRCTC to fork out half of its convenience fee revenues yesterday, there was a huge investor backlash and sharp pieces (you can read ours here and here) criticising the move.

Today morning, the government backpedalled. What’s interesting is that this news was broken by the twitter handle of DIPAM (the department of investment and public asset management.

Further, DIPAM Secretary Tuhin Kanta Pandey said in an interview that his department always advised other ministries to be mindful of the interest of minority shareholders while taking decisions that affect listed PSUs.

Pandey also hopefully told CNBCTV18: “DIPAM’s recommendation should not be linked to its selling stake through OFS; it should be looked at as a more fundamental issue and not transactional issue.”

Well, one takeaway from this episode is that the government is mindful about its disinvestment target and does not want it to be derailed by a decision which would have netted it Rs 500 crore at most in a year.

Apart from IRCTC, our research team has the following notes for you:

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IndiGo: Sky is clear to get to the next altitude

Weekly Tactical Pick: Easy Trip Planners

Marico: Strong growth across categories, market share gains continue

Bajaj Auto: Valuation reasonable for a long-term ride

Lupin: Competitive pressure remains in the US market

Dalmia Bharat: Q2 resilient, but risks remain

Tata Power: Generation disappoints, but renewable portfolio drives growth

What else are we reading today?Chennai Super Kings (not out) Rs 7,240 crore. N Srinivasan c Supreme Court b Analysts

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Herd Immunity Tracker: Vaccine hesitancy emerges as a hurdle

Supply constraints an opportunity for fundamental change at companies

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The climate won’t wait. We need a carbon tax now (republished from the FT)

Picks from our technical analysts

Bharat Electronics, PI Industries, Can Fin Homes and ITC (These are published every trading day before markets open)

Ravi Krishnan

Moneycontrol Pro