RBI’s unanswered questions - A.Seshan

........The year was as difficult as any in the recent years with the options before the Bank in policymaking being limited in the context of the eternal choice between growth and price stability. The Bank has pointed out more than once that it is only a short-term conflict and, in the long run, price stability promotes growth. The Report refers to the RBI being faced with the Hobson’s choice in framing monetary policy in the context of slowing growth rate and ‘lingering inflation’ (I.10). Purely on semantic grounds, I would say that it was Catch-22 for the Bank. A Hobson’s choice is no choice at all. On the other hand, a Catch-22 means ‘a no-win situation’ or ‘a double bind’ of any type...............

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