By keeping the key policy rates unchanged in the Mid-Quarter Review of the Monetary Policy announced by the RBI on September 17, the RBI has indicated the extent of caution displayed and its renewed resolve to fight inflation unless it comes down to the desired level.
A cut in the Cash Reserve Ratio by 25 bps to 4.5 per cent will make the liquidity position of banks comfortable to enable them lend productively. In a nutshell, it is a cautious policy announcement with intent to strike a fine balance between growth and inflation.
A boost to growth
This has reference to the editorial ‘‘A reforms downpour’’ (Business Line, September 17).
The Prime Minister’s decision to introduce major reforms such as 51 per cent in FDI retail, 10 per cent in single-brand retail and 49 per cent in civil aviation is with a view to reviving the economy.
These reform measures will, in the long run, help the country achieve a 8.2 per cent growth rate. The Government has not been able to push reforms so far due to political compulsions.
The country is in the threshold of an economic crisis with the prices of essential commodities skyrocketing. At this critical juncture, the Government, led by Manmohan Singh, has taken bold decisions.
The decision has been widely hailed by industry captains, as a right step in the larger interest of the country.
The Congress-led Government must make efforts to mitigate the sufferings of aam aadmi; the interests of its citizens must get priority over political polarisation.