'If 50% tariffs continue, near-term adverse impact on growth very likely'

The importance of domestic savings is likely to increase, given the uncertainties on our external balance

Saugata Bhattacharya, member of the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) says the earlier RBI research estimate of 1.4–1.9 per cent real neutral rate is probably outdated. Updated estimates of potential growth, inflation and other analytic metrics are needed to assess the appropriate terminal rate, he said during a telephonic interview with Manojit Saha. Edited excerpts: 

You have noted that the reduction in deposit was more than the loan rate, and that is a matter of concern. What is the reason for your concern? 

At the outset, I give my usual disclaimer. Comments are my opinion, not