In his first interaction with economists as the Reserve Bank of India (RBI) Governor, Urjit Patel has downplayed the risk of inflation sighting several factors including the Goods and Services Tax (GST).
The RBI chief makes it a point to meet the country's influential economists and the industry big-wigs before announcing the monetary policy.
During these meetings, the RBI usually does not reveal its plans for the future but instead is keen on the suggestions put forth by the people.
Secondly, the point which downplays the risk of inflation was that the Monetary Policy Committee (MPC) going forward may accept growth as one of its objectives, which could be a significant departure from the policy stance.
So, the RBI's philosophy normally has been to control inflation to encourage growth. In the meeting, the new Governor pointed out that the MPC has the mandate under the RBI Act to maintain price stability while keeping in mind the objective of growth.
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