HT Image
HT Image

Reddy reckoner

The quarterly review of the RBI?s monetary and credit policy has answered one critical question. For the 1st time, the bank is following a policy of ?inflation targeting'.
By HT Correspondent | None
PUBLISHED ON JUL 28, 2006 12:11 AM IST

The first quarter review of the RBI’s monetary and credit policy for 2006-07 has answered one critical question. For the first time, the central bank has said it is following a policy of ‘inflation targeting’ — using monetary management to keep inflation within a specified range. Though this had become implicit following the series of hikes in short-term rates over the past few years, the RBI has revealed the target for the first time. Inflation will be kept in the 5-5.5 per cent range for the year, so long as growth stays between 7.5 and 8 per cent. This is also the clearest signal yet of the increasingly globalised nature of the Indian economy. The RBI’s moves have been in tandem with central banks around the world, which have all been been steadily hiking interest rates. The US Federal Reserve has carried out as many as 17 increases in the last three years. Therefore, to dub RBI Governor Y.V. Reddy as an “inflation hawk” for raising rates, with the potential risk of slowing down growth by increasing the cost of capital, would be unfair. Given local and global pressures, he has done the best he could.

But this does not mean there are no worries on the economic or monetary fronts. The RBI, like any central bank, can only manage factors within its control. If there is too much money in the system, it can suck it out. If the economy needs additional funds to fuel growth, it can, within limits, meet such needs. What it cannot do is formulate or implement policies that are under the government’s control. The RBI governor can only warn, as he has done repeatedly, that rising energy costs need to be passed through to the economy more effectively — he cannot order the government to do so. The oil subsidy bill is rapidly reaching critical levels — latest figure is over Rs 92,000 crore. So far, strong industrial growth and buoyant tax collections have helped keep the inflation monster at bay. But one deficient monsoon — and the current one is already showing worrying signs of being agriculturally deficient — or a deterioration in the already fragile situation in the Middle East — could upset all calculations.

SHARE THIS ARTICLE ON
app
Close
A replica of Ram Mandir (Ayodhya) installed inside a mall, in New Delhi. (Representational image/PTI)
A replica of Ram Mandir (Ayodhya) installed inside a mall, in New Delhi. (Representational image/PTI)

Hindu non-profit org Jagadguru Kripalu Parishat contributes Rs1 crore for Ram Mandir

PUBLISHED ON JAN 19, 2021 08:54 AM IST
The VHP’s nationwide campaign, Shri Ram Janmabhoomi Ram Mandir Nidhi Samarpan Abhiyan, for the construction of Ram Mandir started on January 15 and will continue till February 27
Close
Supreme Court-appointed panel on farm laws to hold first meeting on Tuesday(PTI)
Supreme Court-appointed panel on farm laws to hold first meeting on Tuesday(PTI)

News updates from Hindustan Times: SC-appointed farm laws panel to meet today

By hindustantimes.com
PUBLISHED ON JAN 19, 2021 08:52 AM IST
Here are today’s top news, analysis and opinion at 9am. Know all about the latest news and other news updates from Hindustan Times.
Close
Schools and colleges have remained shut since March 2020 in the light of the Covid-19 pandemic which has infected more than 10,571,700 people so far.(HT_PRINT)
Schools and colleges have remained shut since March 2020 in the light of the Covid-19 pandemic which has infected more than 10,571,700 people so far.(HT_PRINT)

Schools for class 10, 12 resume in Tamil Nadu: All you need to know

By hindustantimes.com | Edited by Shivani
PUBLISHED ON JAN 19, 2021 08:50 AM IST
Strict Covid-19 protocols have been put into place by school authorities for Cass 10 and 12 students.
Close
Union finance minister Nirmala Sitharaman chairs a pre-Budget meeting with states and UT's ministers at north Block, in New Delhi on January 18. (PTI)
Union finance minister Nirmala Sitharaman chairs a pre-Budget meeting with states and UT's ministers at north Block, in New Delhi on January 18. (PTI)

Union budget: Development Finance Institution likely to be announced

By Rajeev Jayaswal
PUBLISHED ON JAN 19, 2021 08:49 AM IST
The institution is expected to be created by merging some existing financial institutions to meet the long-term financing needs of new, stalled, and work-in-progress infrastructure projects worth over Rs100 lakh crore
Close
Ex-IPS officer Sanjiv Bhatt has been convicted and sentenced to life by a Jamnagar court.
Ex-IPS officer Sanjiv Bhatt has been convicted and sentenced to life by a Jamnagar court.

Indian American organizations urge Supreme Court to give bail to Sanjiv Bhatt

PTI
PUBLISHED ON JAN 19, 2021 08:47 AM IST
Senior Congress leader and former minister Shashi Tharoor said he was “outraged by the injustice meted out” to Bhatt. The top court has scheduled a bail hearing for Bhatt on January 22.
Close
IMD scientists said monsoon in 2020 was unique with large month-on-month variation and unusual rainfall patterns in four sub-regions of the country. (Raj K Raj/HT file)
IMD scientists said monsoon in 2020 was unique with large month-on-month variation and unusual rainfall patterns in four sub-regions of the country. (Raj K Raj/HT file)

This monsoon, IMD to begin special forecast for rain-fed areas

By Jayashree Nandi
PUBLISHED ON JAN 19, 2021 08:31 AM IST
IMD will also use a multi-model ensemble forecast (a combination of different models) for the first time to predict monsoon rains this year
Close
A view of the Noida Gate after farmers blocked Chilla (Delhi-Noida border) during the ongoing protest against the new farm laws, in Noida on Monday. (HT Photo)
A view of the Noida Gate after farmers blocked Chilla (Delhi-Noida border) during the ongoing protest against the new farm laws, in Noida on Monday. (HT Photo)

Farmer’s protest: Delhi’s Singhu, Tikri borders remain completely blocked

PUBLISHED ON JAN 19, 2021 08:27 AM IST
Apart from Chilla and Ghazipur borders, seven borders that continue to remain completely blocked, are Singhu, Tikri, Auchandi, Jharoda, Piao Maniyari, and Mangesh borders
Close
Himachal Pradesh chief minister Jairam Thakur casts his vote in Mandi in the first phase of panchayat elections on Sunday.(ANI Photo)
Himachal Pradesh chief minister Jairam Thakur casts his vote in Mandi in the first phase of panchayat elections on Sunday.(ANI Photo)

Second phase of panchayat polls in Himachal Pradesh today

By hindustantimes.com | Edited by Amit Chaturvedi
PUBLISHED ON JAN 19, 2021 08:14 AM IST
In the first phase, 1,227 panchayats went to polls on Sunday. Electoral Officer Sanjeev Mahajan said a voter turnout of over 70 per cent was recorded in the first round.
Close
A worker disinfects the poultry farm in Shivapur village to protect chickens from bird flu decease. (HT Photo )
A worker disinfects the poultry farm in Shivapur village to protect chickens from bird flu decease. (HT Photo )

Bird flu confirmed in 5 states for poultry, culling operations underway

By hindustantimes.com | Written by Kanishka Sarkar, Hindustan Times, New Delhi
PUBLISHED ON JAN 19, 2021 08:13 AM IST
The central team formed for monitoring the situation in the affected areas of the country is visiting the bird flu affected sites.
Close
Fog shrouds parts of the national Capital, at the Ghazipur area in New Delhi. (File photo)
Fog shrouds parts of the national Capital, at the Ghazipur area in New Delhi. (File photo)

Dense fog reported from most northern states; temperature likely to drop

By HT Correspondent | Edited by Smriti Sinha
PUBLISHED ON JAN 19, 2021 08:12 AM IST
Due to the change in wind direction, minimum temperatures are likely to fall by 2 to 4°C during the next three days, leading to cold wave conditions
Close
Representational image. (Amal KS/HT PHOTO)
Representational image. (Amal KS/HT PHOTO)

Delhi’s temperature set to drop further, air to improve: IMD

UPDATED ON JAN 19, 2021 08:44 AM IST
The AQI in Delhi on Monday was 372, categorised as "very poor", a minor increase from 347 the previous day, according to Central Pollution Control Board
Close
Farmers raise slogans as they ride tractor during an ongoing protest against the new farm laws, at the Delhi-Ghazipur border on Monday.(ANI Photo)
Farmers raise slogans as they ride tractor during an ongoing protest against the new farm laws, at the Delhi-Ghazipur border on Monday.(ANI Photo)

Supreme Court-appointed panel on farm laws to hold first meeting on Tuesday

By hindustantimes.com | Edited by Amit Chaturvedi
UPDATED ON JAN 19, 2021 07:47 AM IST
The Supreme Court had on January 12 stayed the implementation of the three laws, against which farmers are protesting at Delhi borders for over 50 days now.
Close
File photo for representation.(ANI)
File photo for representation.(ANI)

13 killed as truck runs over them in Gujarat's Surat

By hindustantimes.com | Edited by Shivani
UPDATED ON JAN 19, 2021 08:59 AM IST
"All the deceased are labourers and they hail from Rajasthan," the news agency reported quoting police.
Close
The Uttar Pradesh government has approached the Supreme Court seeking a transfer of the pending writ petitions from the Allahabad high court(PTI)
The Uttar Pradesh government has approached the Supreme Court seeking a transfer of the pending writ petitions from the Allahabad high court(PTI)

Transfer pleas on ‘love jihad’ law to Supreme Court: UP govt tells Allahabad HC

By Abraham Thomas, New Delhi
UPDATED ON JAN 19, 2021 07:05 AM IST
The state government made the disclosure before the high court on Monday during the hearing of a bunch of pleas against the Uttar Pradesh Prohibition of Unlawful Conversion of Religion Ordinance, 2020.
Close
Women farmers carry placards and flags during a protest against the new farm laws on the Women Farmer Day at Singhu Border, in New Delhi.(ANI)
Women farmers carry placards and flags during a protest against the new farm laws on the Women Farmer Day at Singhu Border, in New Delhi.(ANI)

LIVE: SC panel on farm laws to begin work on January 19

By hindustantimes.com
UPDATED ON JAN 19, 2021 06:45 AM IST
On Monday, the Centre postponed the tenth round of talks between its representatives and farmers to January 20. Earlier it was scheduled for today.
SHARE
Story Saved
OPEN APP