.......However, while Chidambaram’s finance ministry seems to be beginning to get its act together, major challenges loom on the economic front. A critical meeting between the finance minister and Reserve Bank of India (RBI) Governor Duvvuri Subbarao has also been keenly discussed in financial circles since it is now well known that Subbarao has, by and large, made further easing of interest rates conditional to fiscal consolidation. Both the ministry and RBI will need to address the problem of slowing growth and the continuing threat of inflation in a fluid global economic situation. And to that extent the meeting assumes great significance, particularly since RBI did not reduce rates even at its last policy review on 31 July, choosing instead to reduce the statutory liquidity ratio (SLR) by 100 basis points to 23 percent to give banks some room to lend.....
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