What explains RBI's 'near-unanimous' inaction even as inflation was rising?

For the RBI, a correct reading of its mandate would have been that the inflation target is 4%, not 6%. And action to raise interest rates should have begun last year, writes T N Ninan

A former governor of the Reserve Bank of India (RBI), reminiscing on his days at Mint Road in Mumbai, told your columnist once that one of his rules was never to surprise the market with negative news. He said it was ok to give the market a positive surprise but, if there was unpleasant action coming, the market should be given advance warning of what to expect. Given the way in which the RBI’s off-cycle jacking up of the policy rate for overnight money (and that by more than the usual 25 basis points) has been received, there can be