...........The question that rises now is: did the RBI and government press the panic button much too soon? Hindsight is always 20:20 and it is easy to comment on the RBI’s actions, especially when you don’t have access to the information and data that prompted its actions. Yet, one needs to ask if the measures, especially the second set announced on the eve of Independence Day, were called for. Of course, to be fair to the central bank, it can only do what is within its powers and that is using monetary policy tools; these cannot substitute for resolute action from the fiscal side, which is the government’s prerogative. Indeed, the comments of Prime Minister Manmohan Singh on Saturday at a RBI function couldn’t have been more apt..........
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