Inflation-growth balance 'somewhat unsettled': Shaktikanta Das
inflation, especially in food items, dominated the discussions of the early December monetary policy review where two members voted for a rate cut, showed the minutes of the deliberations published Friday.
The rate-setting panel, chaired by the then central bank governor Shaktikanta Das, kept policy rates unchanged amid demand for a reduction from two external members.
Ram Singh and Nagesh Kumar — the two dissenting voices — cited the slowest growth in seven quarters in the three months to September, a 60 basis-point reduction in the FY growth projections, and low core inflation as factors having influenced their vote in favour of a quarter percentage point rate cut, showed the minutes.
But the other members of the Reserve Bank of India's (RBI) monetary policy committee (MPC) expressed concerns about the balance between growth and inflation turning adverse. An expected price rise in non-farm products and heightened global uncertainty likely adding pressure on domestic macroeconomic metrics also made the case for deferring the window to cut policy rates, showed the minutes. Das pointed out that the «inflation growth balance has got somewhat unsettled».
«The policy priority at this critical juncture has to be on restoring the inflation-growth balance. The fundamental requirement now is to bring down inflation and align it with the target,» Das was cited as saying in the minutes.
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