Why small could be big for Chidambaram

.....The RBI, currently headed by Duvvuri Subbarao who has had a distinguished stint in the finance ministry before taking charge at the central bank, has already made it clear that its hands are largely tied as far as reducing interest rates to spur growth is concerned. It has reduced rates 50 bps in April and cut the statutory liquidity ratio (SLR) by 100 basis points (one percentage point) on 31 July to allow some banks to lend to productive sectors. But beyond that, monetary policy can achieve precious little. The ball is now clearly in New Delhi’s court. And Chidambaram will have to be the principal player.......

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