Bleak economic scenario

.....The RBI cannot be expected to surrender its remit to hold inflation within reasonable limits. At 9.75 per cent consumer price inflation is at least four per cent too high for anyone's comfort. Hence the refusal by RBI Governor D Subbarao to reduce the prime lending rate at the time of the latest monetary review a few days ago. Should CPI continue to stay high, it is unlikely the central bank would cut the policy rate even in the fourth quarter. If Chidambaram is keen on rate- reduction, he should first tackle the burgeoning fiscal deficit.

Read - FPJ