RBI's efforts to cool down inflation and growth of GDP are showing the intended results. There is little doubt that this was the right thing do to. However, it is commonly known that the current bout of inflation had nothing to do with Monetary policy in India.
If there is a silver lining to all of this, it is that RBI has plenty of room whenever it decides to loosen interest rates and provide a boost to growth. This is in stark contrast to many of the developed world economies where interest rates are already at historical lows.
As D. Subbarao points out , the government has to start addressing supply side issues to get a handle on inflation in the long term. Any reforms that are initiated will take several years to show consistent results. There is a desperate need to show some urgency in this regard.
But , amid all that is going on with corruption scandals you don't get a sense the government is paying enough attention except for the occasional sound byte . I'll believe it when i see it happen.
If there is a silver lining to all of this, it is that RBI has plenty of room whenever it decides to loosen interest rates and provide a boost to growth. This is in stark contrast to many of the developed world economies where interest rates are already at historical lows.
As D. Subbarao points out , the government has to start addressing supply side issues to get a handle on inflation in the long term. Any reforms that are initiated will take several years to show consistent results. There is a desperate need to show some urgency in this regard.
But , amid all that is going on with corruption scandals you don't get a sense the government is paying enough attention except for the occasional sound byte . I'll believe it when i see it happen.
No comments:
Post a Comment