Not possible to control inflation without sacrificing growth
15 Jun 2012
A few days ahead of the Reserve Bank's mid-quarter monetary policy review, governor D Subbarao said the RBI could not control inflation without sacrificing growth.
This runs counter to expectations of economists and analysts who have been looking to the bank to dole out a rate cut on Monday to help spur the sagging economy.
Poor industrial output data has added to expectations, however, inflation for May at 7.5 per cent played spoilsport. (See: India's WPI inflation creeps up to 7.5 per cent in May)
However, some still continue to expect that the apex bank would cut repo rates by 25 basis points or slash the cash reserve ratio.
Analysts say Subbarao's comments at an RBI event suggest that growth continued to remain on the back burner for the central bank, and that decisions would be taken based upon the prevailing inflation rate.
The Reserve Bank governor said that sacrificing GDP in the short-term was a small price for the medium-term.
