The ball is in RBI’s court | Business Line

The ball is in RBI’s court | Business Line

M G WARRIER
The observations (a) In the ensuing few months, political economy constraints would prevent the Government from taking strong rectification measures, (b) Hence, the Government should give the RBI a free hand to crush inflation with unequivocal monetary tightening, and (c) The Government must recognize that when there are political economy constraints, it is only monetary policy which can hold up the rear, could turn out to be prophetic in 2013-14. GOI has an option to allow the central bank follow the path of prudence and caution it has been following or to follow a pre-election-come-what-may approach. Weakening the RBI in any sense at this juncture will have disastrous consequences.

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