As India seeks to control high inflation, RBI Governor D Subbarao has said a little sacrifice in growth is “inevitable” amid efforts to bring down prices to acceptable levels.
Subbarao said criticism is often directed towards the central bank that even though it has raised interest rates and runs a tight monetary policy, inflation is still “high and persistent” and growth has been hurt.
The RBI’s response to the criticism is that “some sacrifice of growth in inevitable, a necessary price we have to pay to bring down inflation. But that sacrifice of growth is only in the short term.