.........it is pertinent to note that the most telling comments from the Central Bank are hidden within the six page statement and highlight the urgent need by the government to " revive investment". In a strongly worded statement, the RBI underlines that a " competitive interest rate" is necessary but not sufficient - and that sufficiency would require " bridging supply constraints, staying the course on fiscal consolidation, both in terms of quantity and quality, and improving governance." Clearly, the RBI is highlighting the limitations of the credit channel of monetary policy transmission in the backdrop of persistent food inflation, anchored inflationary expectations and the morass created by the inertia in strategically addressing massive supply side bottlenecks............
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