30 JUL,2019 | MEDC
Of all Asian central banks this year, the RBI has probably been the most proactive in cutting interest rates to spur economic growth. Obviously, this is possible only when inflation is within the policymaker’s comfort zone, which it largely has been in the recent past. However, with the ongoing (and seemingly unending) US-China trade friction, there are fears of a broad-based global slowdown that could impact India’s growth prospects. The silver lining is that India won’t be as badly affected from this trade uncertainty as other economies that are embedded more deeply into global value chains. There is reason for optimism, including a steadily improving monsoon, lower oil prices, and an easing of the domestic credit crunch. If the government wants speed, skill and scale to characterise its administrative approach, decision-makers in the corridors of financial power need to design their moves accordingly.
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