Amid criticism from some quarters that it is giving priority to price rise issues over growth, RBI deputy governor KC Chakrabarty on Saturday said it is unfair to blame the central bank for low growth as sustainable economic expansion is possible only with moderate inflation.
"You don't blame the RBI for killing growth, you blame inflation for killing growth...our pursuing moderate or low inflation objective is to facilitate growth and not to kill growth," he said, addressing students of a management school in Mumbai.
"The basic complaint against RBI is that it is killing growth by keeping interest rate high. But people forget that interest rate is high because inflation is high and inflation is high because people are not working. For inflation to come down, you have to produce more food grains at less prices," he said.
A growth rate of above 9% is possible only if inflation comes down to 5% level, he said.