....The trade-off between growth and inflation is purely a short-term phenomenon. Over the medium term, there is no such trade-off. Over the medium to long term, high growth is possible only in an environment of low inflation. However, even in the short run, the primary responsibility of a central bank is to control inflation. RBI’s ability to adopt an easier stance would be facilitated if headline inflation, particularly non-food manufacturing inflation, begins to show signs of a decline. At the moment, I agree with RBI’s policy. But growth is certainly important. As soon as we get clear signs of a declining trend, action towards an easier monetary policy can be taken.......
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