The article is well written.RBI has reduced the policy rates
compromising on its own conviction that inflation is still not under
control and there is suppression of inflation.In this policy review
what one can read is that at any cost reduction has to be given and
accordingly language has been beautifully twisted.It is very clear from
the wordings that the need to support growth and revive the confidence
of investors can happen only if RBI relaxes the rates although there is
absolutely no room for that.The reduction has been effected to please
the market and the govt. This has been done cleverly mixing up the
macro economic factors and suitably justifying the predetermined
policy.The impact can be felt in the days to come Liquidity cannot
improve unless the banks raise deposits which can happen only if
inflation is brought under control. Growth can happen only if the
investment environment is made conducive.Investment can happen only the
confidence in the economy is revived by Govt.
Dr.T.V.gopalakrishnan
(This is in response to an article Wrong diagnosis and bad prescription in Business Line dated 30/01/13)
Dr.T.V.gopalakrishnan
(This is in response to an article Wrong diagnosis and bad prescription in Business Line dated 30/01/13)