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Updated: December 13, 2013 00:07 IST

Rajan: We are uncomfortable with IIP, CPI numbers

Special Correspondent
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Raghuram Rajan
Raghuram Rajan

Reserve Bank of India Governor emphasised that no single piece of data would determine RBI’s policies, adding that while the IIP surprised on the downside, CPI surprised on the upside.

Reserve Bank of India Governor Raghuram Rajan said the IIP and the CPI numbers were surprising, and the central bank would have to look at the details and then frame its policies.

“We are uncomfortable with the numbers,” Dr. Rajan said here at a press conference after the Board of Governor meeting.

Pointing out that he would not like to give quick reactions without going into “the details of what went into it,’’ the central bank chief said, “We will wait for the WPI numbers, which are expected next week, but certainly the CPI is higher than the market expectation.”

He, however, emphasised that no single piece of data would determine RBI’s policies, adding that while the IIP surprised on the downside, CPI surprised on the upside.

Weaker growth

“Clearly, growth is weaker than we would like, and inflation is higher than what we would like. In a situation like this, we have to calibrate our policies and make trade-offs based on all available data,” he said.

However, growth of liquidity would would be maintained, he said.Dr. Rajan spoke at length on the need for financial inclusion, saying that this and the ease of investing in safe entities could help prevent Saradha-type scams.

To a question on the new banking licences, he said these might be announced early next year.

“As for how many… this will be based on the recommendations of the committee, and what the RBI decides. It will be based on what we think is appropriate and who is meeting the norms, the RBI Governor said.

More In: Business | Economy

On the issue of new bank licences, a few common man's concerns need
expression. Recall how civil aviation was opened up, all to liberally
without taking care of the state airlines. The result was the descent
of the merged state airline. Grant more new bank licences; no problem
but more importantly ensure that the public sector banks are
nourished back to a rosy health. 2011 Census statistics released
reveal that half the rural population lives in just 1.2 lakh villages
out of the total of 6.4 lakhs. Will regulator and finance ministry
tell the peoples in how many of these villages private banks licensed
15 years back have presence? This has a great bearing on the
'financial inclusion' of which there has been a lot periodically.

from:  s subramanyan
Posted on: Dec 13, 2013 at 09:16 IST
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