If I were RBI governor...

MONETARY POLICY: VIEW POINT - Jamal Mecklai

Jamal Mecklai

I would certainly feel that I have earned a nice, stiff gin and tonic when I sit on my lovely verandah tonight. And, sipping my G&T, I might even chortle a bit when I think about the elegant way in which I have been able to build such a consensus on deregulation, all the time being seen as the only one holding back.

I had been really worried because I knew that the only way the government, hamstrung as it was by its coalition partners, would be able to act only if there was a crisis. With the economy booming, this was as far away as anything, and I worried that our half-closed half-open economy was "� or, would certainly become "� unstable.

So, in some senses, I was actually grateful for the nudge up in inflation. It compelled me to "� finally "� take the cap off the rupee, which, of course, shot higher. I think it's a bit overdone, by the way, but this quasi-crisis has "forced" me to release dozens of unnecessary controls.

But, boy, it has been tense. May be I should fix myself another one.

I'm glad we thought about cutting the risk weightage on small housing loans "� I know this was one area that had taken quite a hit. And, of course, inflation is a problem. But the truth is that this really is more a supply side issue.

I know, I know money supply has been growing too fast, and inflation is rising globally and oil prices are high, but a large part of our inflation is from the rise in the price of food, demand for which, even for a modern sanyasi like me, is quite inelastic.

In any event, I think we've got inflation under control "� that's why I didn't raise rates this time. And, as I said, the nervousness all around, particularly you know where, is freeing my hand to move faster. There's a lot of serendipity, too.

Look, for instance, at the timing of the release of the Mistry Committee report, which so wonderfully accelerates the way forward.Look for a lot more action over the next few months. And then... and then, perhaps, I'll be able to take a real break, and have more time to sit on the verandah like this.