The Indian Express
RBI’s Monetary Policy Committee member Jayanth R Varma is of the view that there is a need to be more patient when it comes to gliding inflation to the 4 per cent target, and this is the price to pay for avoiding a growth shock.
With retail inflation at 5 per cent now and an environment of greater economic stability, how fast should the Reserve Bank of India go in reining in inflation? There are differences of opinion in the Monetary Policy Committee of the central bank.
“I have been saying for quite some time now that while there is great urgency for bringing inflation well below the upper tolerance band, we can be more patient when it comes to gliding inflation to the target. A more rapid pace of reduction could impose an intolerable growth sacrifice. We should be willing to accept inflation between 4 per cent and 5 per cent for several quarters as the price of avoiding a growth shock,” Varma, Professor of Finance and Accounting, IIM
