............Well, the confusion has been largely on account of Dr Gokarn's colleague, Dr K.C. Chakrabarty, claiming that the current interest rates in India were not so high to significantly affect growth. Also, the impact of the central bank's past policy rate hikes was being “overplayed”, he held, clearly referring to RBI-bashers within the Government, even if not in so many words. The fact that Dr Chakrabarty said all this on the same day that Prof Basu made a case for aggressive rate cuts did not help matters. It seemed to suggest a complete lack of coordination, short of hostility, between the Finance Ministry and the RBI, when concerted action by policymakers is precisely what is required now to drag the Indian economy out of its present morass. And unlike even three months back, there is
actually increased scope for a convergence of positions, as reflected in the much-less hawkish tone of Dr Gokarn's — or even the Governor, Dr D. Subbarao's — recent utterances...................
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