Monetary policy must be transparent

The rise in consumer price inflation and decline in industrial production are going to be pressing concerns for monetary policy. Next week, when RBI governor Raghuram Rajan makes the announcement, he will not only have to worry about the impact of a possible US taper announcement a day later, but also that of worsening economic data in India. Recent signs of a recovery have been weak. Hopefully, the contraction in demand will pull overall inflation down, albeit slowly.

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