......There are people in the BJP who believe that Raghuram Rajan is choking off investment by using the rate of interest as an anti-inflation weapon. But a central banker has no other weapon; he has to play golf with one club. His predecessor RBI Governor had made it clear that he sees the inflation as a result of excess demand as indicated by the budget deficit. Bring down the deficit, he more or less explicitly said, and I will cut interest rates. The budget deficit has not been brought down whatever P Chidambaram’s window-dressing may say. The incoming FM will have to seize the bull by the horn, reveal the true numbers and make drastic cuts in expenditure for the remainder of FY15...........
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