RBI is again geared up to review its Credit policy on 25th October. It has been a top task for RBI since last one year . Inflation which is above the comfort level since long time is bothering all policy maker . RBI Governmer is still maintaining that Interest rate hike is the best tool for controlling inflation. RBI has been hiking its policy rate ( repo rate ) continuiously since March 2010 . It is 12 time now . Majority of the Bankers still feel that RBI will again hike repo rate by 25 bps to take it to 8.50% .
Is it really the way to control the Inflation ? I think No . It is definitely one of the tool but not the only tool for a Country like India . Indian high Inflation is due to the Supply side issue and not demand side issue . One can not discourage some one to postpone buying decison simply by hiking the interest rate . The persistent high Inflation in India is causing great impact to its Growth . GDP Growth rate & IIP statistics is a clear indication . India need strong policy to encourage supply & Distribution infrastructure . India was about to welcome Global Gian Wall Mart and other but at the last stage it could not happen .
Let see what RBI Governer is announcing
Is it really the way to control the Inflation ? I think No . It is definitely one of the tool but not the only tool for a Country like India . Indian high Inflation is due to the Supply side issue and not demand side issue . One can not discourage some one to postpone buying decison simply by hiking the interest rate . The persistent high Inflation in India is causing great impact to its Growth . GDP Growth rate & IIP statistics is a clear indication . India need strong policy to encourage supply & Distribution infrastructure . India was about to welcome Global Gian Wall Mart and other but at the last stage it could not happen .
Let see what RBI Governer is announcing
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