The Reserve Bank of India (RBI) should be congratulated for its standstill policy of not making any changes in the cash reserve ratio or policy rates. It is clear that it is concerned more with inflation than growth. And if the Government wants to walk the path of growth alone, the RBI too can do so in its anti-inflation drive! It is indeed surprising that, unlike in the past, there were no sound bytes from the Finance Ministry as to what the RBI should do in the policy review. Probably, it is the realisation that the central bank has the courage of its own conviction and not that of the Finance Ministry. The RBI can get autonomy by exercising it in policy making. When asked about monetary easing, the Chief Economic Adviser is reported to have said: “You will know from RBI’s credit policy tomorrow. We have entrusted the central bank to look at the monetary side; let it do its job.”......
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