......But at the present time there is considerable pressure on the RBI to undertake monetary easing. Given the unacceptably high inflation rate, monetary easing would be hazardous. Hence, the RBI deserves full support in its cautious approach to monetary easing. While the fisc is weak and cannot afford to undertake further easing, pressures would mount to ease monetary policy. In other words, monetary policy will be the sacrificial lamb to appease the powerful lobbies. There are overt pressures from the government to goad the RBI to reduce interest rates. What is of concern that policymakers and opinion makers genuinely feel that all that it takes to stimulate growth is lowering of interest rates. Thus, sooner or later RBI will be forced to reduce interest rates......
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