RBI must sacrifice inflation aim to aid growth: Ex-Guv Rangarajan

India will miss its fiscal deficit target of 6.8% of GDP by at least 1 percentage point, he said

India’s monetary policy makers need to support economic growth even at the cost of their inflation-fighting credentials, as tackling the pandemic situation requires extraordinary measures, a former central bank governor said.

The federal government’s large borrowing plan and the Reserve Bank of India’s willingness to support it are bound to fan inflation, Chakravarthy Rangarajan, who headed the RBI during 1992-97, said in an interview. What the central bank should be worried about is how high the inflation goes up, he said.

While the RBI targets to keep retail inflation at the 4 per cent midpoint of its 2 per cent-6 per