8 per cent tariffs for 8 per cent growth

 When RBI Governor Dr. Y.V. Reddy presented the mid-year review of the monetary policy earlier this week, he noted that in the first half of this year the rupee appreciated and that India accumulated an additional $ 17.2 billion as reserves.

 However, as he left interest rates and the CRR untouched, there is little reason to believe that the credit policy will address the issue of capital inflows that is fuelled by the expectations of rupee appreciation.

 If Dr. Reddy decided not to cut interest rates, there must be a good reason for it. But since currency expectations are clearly a problem for him, he must have another solution in mind. Perhaps this issue will be solved by Finance Minister Jaswant Singh.

 The current scenario provides Mr. Singh with an opportune environment for cutting custom duties. In earlier years the government might have been worried about the impact lower duties would have on India