Ahead of next week’s monetary policy, Finance Minister P. Chidambaram, on Tuesday, said the Reserve Bank of India (RBI) must strike a balance between the needs of pushing growth and controlling inflation.
“I don’t manage the RBI. I just convey the views of the government. It is for the RBI to take a call.
“Our stated position is that the RBI must balance between the needs of stimulating growth and containing inflation,” he told PTI.
The RBI is slated to announce its third quarter review of monetary policy on January 29 amid demands by industry that it should lower interest rates to boost industrial output, which contracted by 0.1 per cent in November.
Before announcing the policy, the RBI Governor holds a customary meeting with the Finance Minister.
In order to contain inflation, the RBI has refrained from lowering interest rates despite nudging by Finance and Commerce ministries that it should take steps to address concerns on growth.
Inflation based on wholesale prices declined to a three-year low of 7.18 per cent in December. However, retail inflation rose for the third successive month in December to 10.56 per cent.
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