RBI Faces Inflation Dilemma in Crucial Policy Meeting

The Reserve Bank of India (RBI) begins its critical Monetary Policy Committee meeting amid economic challenges like high inflation and sluggish GDP growth. With the repo rate unchanged in recent sessions, there's pressure on policymakers to implement corrective measures to tackle inflation and boost economic revival.

The Reserve Bank of India's Monetary Policy Committee commenced its pivotal meeting today in Mumbai, with key decisions on the policy rate looming. Helmed by Governor Shaktikanta Das, the meeting spans December 4-6, culminating in Friday's announcement.

The economic landscape is fraught with challenges, including underwhelming GDP growth, surging inflation, and dwindling production levels, sparking widespread concern. Notably, economist Ashok Gulati marked vegetable inflation as beyond RBI's control, highlighting GDP figures suggesting a possible lag in policy adjustments such as rate cuts.

Although recent MPC meetings held policy rates at 6.5% consistently, the urgency for action is palpable with October inflation at 6.21%, exceeding the RBI's tolerance. With the economy growing only 5.4% last quarter against a 7% forecast, measures to curb inflation and stimulate growth are essential.

(With inputs from agencies.)