RBI's right call

Policy rate pause and debt recast window make sense

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), which will soon complete four years of operation under the new framework, on Thursday rightly decided to keep the policy rates unchanged. Although it is correct that economic recovery is flagging with a continued surge in Covid-19 cases and re-impositions of lockdown in various parts of the country, the outlook for inflation remains fairly uncertain. The rate-setting committee in its resolution, for instance, has noted that reduction in price pressure in key vegetables has been delayed and depends on supply normalisation. Apart from potential pressure from protein-based food