At a time when India is in the midst of a rising interest rate cycle, Ashima Goyal, member of the Monetary Policy Committee (MPC), tells Bhaskar Dutta that the aim is not to have over-tightening but to raise interest rates in line with inflation and growth outcomes. Edited excerpts:
You have pointed out in the latest MPC minutes that it is important to differentiate between inflation in the US and India. With domestic inflation running the risk of becoming broad-based, in your view, how targeted should the Indian policy response be?
We are focusing on inflation as the first priority. Even though it is supply-shock led, it has gone on for a long time because of multiple supply shocks. The