RBI Governor’s perennial dilemma: Growth Vs inflation

..... The Reserve Bank of India (RBI) is again facing a chicken and egg situation, as it has the unenviable task of deciding its priority, whether controlling inflation or propelling growth, when it announces its annual monetary policy on 17 April, 2012. The central bank has been flooded with suggestions and expectations, bordering on pressure, to cut interest rates and ease liquidity with a view to encourage growth, which has fallen below 7% during 2011-12. The macro-economic indicators, however, are giving contrary signals, indicating on the one hand continued high inflation and on the other, slower growth of industrial production. The index of industrial production (IIP) numbers of February 2012 just released shows a growth rate of 4.1%, which is much below expectations, What will the RBI do under these circumstances is being watched with keen interest......

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