IEEMA President Mr. Raj Eswaran's strong reaction to RBI's monetary policy

Mr. Raj Eshawaran, President, IEEMA has strongly come out against RBI because according to him, as in the past, RBI has once again hiked the repo rate in its endeavor to curb inflationary pressures in the economy. Despite the tight monetary policy being pursued for the last two years, RBI has not been able to check the inflation rate. Inflationary pressures show no signs of abating, even though core inflation has been down for some time, making it difficult for RBI to take steps to reduce the cost of credit to revive investment and stimulate growth.

While the need to check inflation is appreciated, the failure to deal with supply side constraints has been primarily responsible for the inflationary pressures in the economy and tackling them through tighter monetary measures and higher interest rates has only lead to further accentuation of the economic slowdown. A judicious balance has to be maintained between keeping inflation in check and boosting the growth impulses of a developing economy like ours.