Apropos of the editorial “RBI lobs ball to Pranab” (FE, January 25), in the kind of situation that we are in and the growing uncertainties faced with monetary policy actions alone cannot achieve the desired purpose unless the central government, on its part, comes out with credible policy initiatives and steps up fiscal consolidation programme. In the context, a cut in the CRR by 50 bps is an intelligent move to infuse liquidity into the system and make banks comfortable to operate so that the growth aspect is equally taken care of without diluting the key policy rates and not letting the inflation go out of control again. Rightly so, the question the RBI Governor has posed—is investment being held back by unfriendly government policy or by high interest rates—doesn’t need answering.
- Srinivasan Umashankar, Nagpur (FE)
