Apropos the timely and lively editorial, "Dr Rajan's dilemma" (November 30), the current economic situation indicates that Reserve Bank of India (RBI) Governor Raghuram Rajan is unlikely to tinker with the present repo rate structure at the fifth bimonthly policy meeting slated for December 1. There is no harm in adopting a wait-and-watch approach on the likely move of the US Federal Reserve to hike rates as that will affect India too.
The editorial rightly points out that the recent increase in consumer prices, which pushed up year-on-year inflation rate to around five per cent, was the main factor for the central bank to take need-based decisions. The RBI also has a statutory obligation to achieve the targeted rate of inflation set for it by the government during the current fiscal.
Rajan's statement highlighting the burden that idle capacity was placing on the Indian economy and how it was deterring corporate investment speaks volumes about his deep concerns about the slow pace of growth in the country. It must be left to the RBI governor to take a final call on the issue.
S Kumar, New Delhi
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