..........While the Finance Ministry and corporate captains have blamed the Reserve Bank of India for not lowering interest rates until recently, the RBI has stuck to its guns that one of the primary goals of monetary policy is to lower inflationary expectations. As RBI Governor D. Subba Rao succinctly put it: “People who are worried about economic growth are typically quite articulate, that they have a platform to express their concerns…I have sympathy with that view (that high interest rates had slowed down growth). I am not saying that’s an invalid criticism. But I just want to say that their voice is heard, but people who are hurt by inflation -- the large majority of the poor -- their voice is not heard.” The RBI Governor’s statement could not have been a sharper indictment of the government’s economic priorities. Many believe the government is courting political disaster.
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