RBI Governor Is Correct

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Reserve Bank Governor Raghuram Rajan, had increased the Repo Rate to create Rupee Stability. This will create the market crash, but Rupee will strengthen due to surprise increase of Repo Rate to 7.5%. Reverse Repo Rate stood at 6.5%. This is considered to be correct not to take the outflow outward. Though some measures must be to free the economy, but inflation must be controlled.

Indian Governor had earned US$ 1.4 Billion by swapping Indian Rupee from two exchange swaps. Simple, If market is left unscathed stock market will increase, but we want to increase the productivity. To increase productivity, inflation must be controlled. Otherwise, it will eat the productivity benefit and keep the country the same without much growth.

But more to be done. RBI must keep the control going and Finance Minister Fiscal Policies must enhance by providing more benefits to the business community, farmers, contractors and more. But Government must come with more reforms, RBI and Finance Minister too.

CAT 2013; Yahoo News

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