By Swati Bhat
MUMBAI (Reuters) -India appointed former World Bank and International Monetary Fund economist Poonam Gupta as the new central bank deputy governor for a three-year term, the government said on Wednesday.
Gupta currently serves as the Director General of the National Council of Applied Economic Research, India’s largest economic policy research institute, and is also a member of the Economic Advisory Council to Prime Minister Narendra Modi.
The appointment comes at a crucial time as the South Asian nation is struggling to boost economic growth lagging at four-year lows, while also facing uncertainty from global geopolitical and economic uncertainties.
India’s economy is expected to have grown at 6.5% in the fiscal year ended on March 31, marginally higher than the government’s initial estimate of 6.4%, but well below the revised growth rate of 9.2% for FY24.
Gupta will replace Michael Patra, a career central banker who joined the Reserve Bank of India in 1985 and served as a deputy since mid-January 2020 until mid-January 2025.
In his role as deputy, Patra was in charge of various key departments including monetary policy, financial markets operations, financial markets regulation and also economic and policy research at the RBI.
Poonam Gupta ideally would replace deputy governor Rajeshwar Rao as a member of the six-member monetary policy committee which is due to meet next week. Rao has been temporarily handling the monetary policy portfolio at the RBI after Patra’s exit in January.
The RBI is widely expected to cut interest rates at a second straight meeting on April 9, with just one more cut expected in August, which would mark the shortest easing cycle on record, a Reuters poll of economists found.
There is no clear trade-off between growth and inflation at moderate inflation levels while the trade-off is more clearly established for very low or very high levels of inflation, Gupta had written in an article soon after the rate cut in February.
“RBI has been chasing a dated inflation number and has often missed its forecast by a large margin. Households’ inflationary expectations have remained misaligned, and transmission of monetary policy has not improved sufficiently,” she said, calling for a fresh look at the inflation targeting framework.
Gupta in a separate opinion piece in March said while avoiding excessive appreciation or volatility of the exchange rate, RBI should still let the rupee move more than has been the case in the recent past.
Persistent interventions had driven down the rupee’s volatility to decadal lows last year but that has changed since Donald Trump won the U.S. elections late last year.
Gupta’s three-year term would begin from the date of her assuming office or until further orders, a notification from the government’s cabinet appointments committee showed.
Gupta has held senior roles at the World Bank Group and the International Monetary Fund apart from the various academic positions over the last three decades. She also chaired the Task Force on Macroeconomics and Trade during India’s G20 Presidency.
(Reporting by Swati Bhat; editing by Sudipto Ganguly and Kim Coghill)
