The government tilt in favor of easing interest rates to spur growth is well known. So the Finance Minister is expecting a rate cut by the apex bank in the second quarter review in December but the RBI Governor chose not to oblige in view of presently sticky inflation.
The Finance Minister said the Government is naturally biased in favor of growth. The RBI has an obligation to contain inflation. They are not necessarily contradictory positions.
They can converge and when they converge the governor can take a call.
The Governor is sensitive to the fact that just as high inflation penalizes the people, low growth also penalizes the people.
Low growth means fewer jobs, lower incomes, fewer self employment opportunities. The RBI Governor will bear all these in mind when he takes a decision.
Courtesy: THE HINDU
No comments:
Post a Comment