All eyes, including those in the government, will be keenly watching RBI governor Raghuram Rajan's monetary policy announcement on June 3
Srishti Pandey | May 30, 2014
A day after assuming charge as the new finance minister on May 26, Arun Jaitley had an interesting visitor in his North Block office – Reserve Bank of India governor Raghuram Rajan. As the meeting went on for 50 minutes behind closed doors, those outside the room waited with bated breath for signs of any discord. None have emerged so far.
After the meeting, both Rajan and Jaitley, told media persons separately that taming inflation remains an important task for both the RBI and the government. In addition, the finance minister highlighted the importance of maintaining a “balancing act”, to bring back the economy on the growth track while tackling inflation.
The finance minister’s emphasis on balancing growth with inflation comes at a crucial time when the apex bank is scheduled to announce its bi-monthly monetary policy on June 3. And apart from bankers, corporate honchos and investors, the BJP government is also going to keenly watch the policy announcement.
The situation is tricky for Rajan for two reasons – first, the consumer price index hasn’t calmed down and increased 8.59 percent in April from a year ago, and second, the BJP hasn’t exactly been a fan of Rajan’s ways to deal with the persistent inflation in the economy.
In such a situation, experts believe that Rajan will for the time being adopt a wait-and-watch policy and leave interest rates unchanged. This would buy him more time to enter into a dialogue with the government and chalk out strategies wherein both the RBI and the government are on the same page.
Since the time of taking over the helm of affairs at Mint Street in September 2013, Rajan has raised the policy interest rates three times in an attempt to rein in inflation but not much has changed. Rajan stood his ground even if it was not exactly to the liking of the previous government led by the Congress party which faced a humiliating defeat in the recently concluded general elections.
While the message from both the RBI chief and the finance minister to maintain a “balancing act” is loud and clear, it is easier said than done. Piggy riding on the UPA’s failure to revive growth or bring down prices, the BJP recorded a thumping victory to form the government with a clear majority. It is not going to compromise too much on its growth agenda. Let’s just hope that the balancing act doesn’t turn into a nasty tug-of-war between the Centre and The Central Bank.
INS Kiltan, the third anti-submarine warfare (ASW) stealth corvette built under project 28 (Kamorta class), was commissioned into the Indian Navy by defence minister Nirmala Sitharaman at the naval dockyard in Visakhapatnam. The anti-submarine warfare stealth corvet
Maharatna enterprise, Steel Authority of India Ltd. (SAIL) has supplied defence grade micro-alloyed grade of steel (DMR 249A) steel plates for the indigenously built anti-submarine warfare (ASW) stealth corvette INS-Kiltan commissioned into Indian Navy. SAIL’s integ
This is the 250th year since the inception of the Survey of India that has been mapping the boundaries since 1767. Archana Mishra spoke to Dr Swarna Subba Rao, former surveyor general of India, who retired in June this year. He joined the department as a deputy superintending surveyor in 1983 a
An experiment carried out to make Uttar Pradesh’s Bijnor district Open Defecation Free (ODF) succeeded due to an official’s innovative approach, noted a World Bank blog. The blog “Compressed demand”: How Uttar Pradesh is making sure rural sanitation subs
As an emerging global power and the most powerful state in South Asia, India has been perennially concerned about protracted political instability and resultant social turmoil in Afghanistan during the past few decades. Indeed, India’s engagement in the realm of development cooperation, since the o
Till the National Investigation Agency (NIA) caught up with him in Delhi on August 17, 70-year-old Zahoor Ahmad Shah Watali, a businessman, was indeed one of the most powerful persons in Kashmir valley. He was known to wield enormous clout in the corridors of power, both in Srinagar and Delhi. His influenc