Summaries by Mythili Bhusnurmath

After 18 months, RBI finally raised its repo rate by 25 basis points and shifted to a 'calibrated tightening' stance. The author argues this action was belated, questioning why RBI delayed despite clear inflation signals and external pressures. While acknowledging the imperative to act, the piece suggests the move might be

The RBI's FCNR(B) scheme successfully attracted over $127 billion, surpassing expectations for dollar inflows and temporarily boosting forex reserves. However, the author critically asserts this success stems from RBI's "errors of judgment." The short-term fix created significant problems: a massive surge in systemic liquidity, increased inflationary pressures, and higher non-performing asset risks. The future dollar repayment burden persists. The scheme merely "postponed the day of reckoning" rather than addressing core economic issues, underscoring a critical view of RBI's short-sighted strategy.

The author strongly criticizes the RBI's MPC for its unwarranted dovish stance amidst India's challenging growth-inflation dynamics. Despite rising inflation and negative real interest rates, the committee's refusal to tighten monetary policy is deemed a serious mistake. The article specifically lambasts the MPC's inexplicable shift to focusing on "core inflation" rather than mandated "headline inflation." This deviates from its core mandate and global norms, especially in India where food and fuel dominate consumption. The author warns of severe economic costs and urges the MPC to consider the real-world impact of its decisions on the populace.