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Clearly, controlling inflation has been the foremost agenda and concern for the Reserve Bank of India governor. This was the why he left key rates unchanged and maintained status quo. He is staying true to his commitment of bringing down consumer inflation to eight per cent by January 2015 and to six per cent by January 2016.
The message coming from Tuesday's policy document is clear; RBI wants to maintain status quo till the supply-side scenario improves. This requires initiatives from the government and a pick-up in ground activity.
However, given the emphasis of the new government on infrastructure growth, some of the rates could have been eased to incentivise investments. The government and RBI must work in tandem for not only controlling inflation but balancing it with growth.
Glenn Saldanha, Chairman & MD, Glenmark
