Reacting to Tuesday’s Reserve Bank of India’s policy announcement, Devendra Kumar Pant, Director, Fitch Ratings India Pvt. Ltd., said that in the absence of significant fiscal consolidation, headroom available for monetary policy action was limited. “Monetary policy in isolation cannot address all the issues the Indian economy is facing.”
According to Anis Chakravarty, Senior Director, Deloitte in India , “with inflationary pressures remaining untamed, at the moment, there is not much room left for RBI to take any further actions for monetary easing. The government needs to resort to other measures, including structural improvements, fiscal consolidation and improving business environment to stimulate growth in the near future.”
Deepak Jalan, President of the Merchants Chamber of Commerce, said that a cut in CRR and Repo rates could certainly enable banks to augment liquidity in the market.