The Hindu Business Line : ‘Policy choices becoming difficult’

Tentative signs of recovery in growth and rising inflation are making policy choices difficult for the Reserve Bank of India, Dr K.C. Chakrabarty, Deputy Governor, said. “Early return to the fiscal consolidation path, exit from the expansionary fiscal and accommodative monetary policy remain the key challenge. The costs of delay in timely exit are being discussed now; but there are costs of delay in economic recovery as well. The policy choices are becoming increasin gly complex for the RBI, as signs of recovery in growth are still tentative, whereas inflation is clearly firming up,” Dr Chakrabarty said in his inaugural address at the 21st anniversary convention of the Association of Professional Bankers at Colombo. The RBI’s current growth outlook is at 6 per cent with an upward bias. “The medium-term objective is to revert to the high growth path of around 9 per cent. This growth trajectory should be inclusive with low and stable inflation,” he added.

— Our Bureau

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‘Policy choices becoming difficult’