This is with reference to the editorial “A mixed bag” (Business Line, October 30). All this while, RBI governors prioritised inflation over growth. As a result, the apex bank has been forced to reduce the growth forecast to just 5 per cent for the current fiscal. While the RBI governor’s move to envisage ‘repo’ as the key policy rate is welcome, he needs to cross-check whether this will bring the desired outcome. The RBI has failed to hold back food inflation even after successive rate hikes. This is mainly due to the rise in fuel prices, particularly diesel. This is a peculiar situation that exposes the lack of coordination between the government and the RBI. On the one hand, the government is increasing fuel prices every month and, on the other, the RBI continues to sacrifice growth by putting the blame on inflation. Both these entities should work in tandem to put the slowing economy on track.
- Vivek Mathai George (HBL)
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