While there were earlier murmurs in some circles about whether the RBI governor Raghuram Rajan will be allowed to continue if a non-UPA political formation took charge in New Delhi, the current economic situation brings the spotlight firmly back on RBI and the gentleman who is the chief of the monetary authority.
As ratings agencies have forecast, the next government in New Delhi will have to carry a huge burden on the economic front, and the rolled-over subsidies are just one part of the problem. For a Finance Minister smart enough to know the next government may not be one where he has any role to play, this was one well-crafted last-ditch sales pitch.
Estimating that the year 2014-15 will be a year of 'fragile recovery', ratings and analytics major Crisil has said India's GDP growth for FY15 could touch the psychologically significant 6 percent, given some key conditions being fulfilled.
Since taking charge in September, the 18 December policy stance has clearly been Rajan's biggest gamble yet. The next round of data - the set of figures the Governor is keenly awaiting - may prove him right. January 28, 2014 will provide all the answers. Till then, the markets and corporate India can breathe easy. #Inflation#Interest rates#Raghuram Rajan#RBI#Vegetable prices
The latest wholesale price index (WPI) number which followed the retail inflation print shows that inflation levels are way beyond RBI's comfort level, and policy intervention by the central bank to battle inflation will have to be a continuous effort. #Inflation#RBI#repo rate hike#Wholesale price index