MPC concerned about oil prices, capital formation, fiscal slippage

Monetary policy should be ready to go on to the front foot, says Michael Patra

The minutes of the Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) meeting on December 5 and 6 show that its members were concerned about global oil prices, the output gap, and underperformance during the rabi season. 
 

RBI’s Executive Director Michael D Patra hinted at a possible rate hike, while external member Ravindra Dholakia argued once again for a rate cut.  

Additionally, the MPC feels that fiscal slippages, given the kind of Budget announcements state governments have made in tandem with the central government, will affect inflation.

The RBI on December 6 left the repo rate unchanged at 6 per cent.