RBI's rate hikes are futile, food inflation the result of high procurement prices

We all know about the great Indian miracle growth from 2003 onwards. What some of us may not know, and a few of us do not want to realise, is that the take-off in Indian growth took place because of a large 450 basis point decline in nominal and real interest rates during 1999 to 2003; and the take-down in growth took place because of a large increase in RBI’s monetary tightness in the mid-1990s.

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