en up the issue with the Finance Minister who is receptive and positive.”However, in its monetary policy review on Tuesday, the Reserve Bank of India kept its benchmark interest rates steady, saying that risks to inflation persist. At the same time, the bank “emphasized that the timing and magnitude of future rate actions is contingent” broadly on what the government does to tackle India’s infrastructure and fiscal challenges.“Policy and administrative actions, which induce investment that will help alleviate supply constraints in food and infrastructure, are critical,” said the RBI in its review. It said that initiatives to provide skills to workers which help them better match labor market requirements would help ease the pressure on wages.The bank subtly took the government to task for its large spending, which has left India with an “unhealthy fiscal situation, http://www.cheaptomsshoessalei.com - cheap toms .” India’s fiscal deficit, or the gap between the government’s income and expenditure, has been widening in recent years.“The anticipated fiscal slippage, which is caused largely by high levels of consumption spending by the government, poses a significant threat to both inflation management and, more broadly, to macroeconomic stability,” said the Reserve Bank.It said that if the government could take actions which would lead to capital formation, starting with the budget in mid-March, it would go a long way toward reducing inflationary pressures.“In the absence of credible fiscal consolidation, the Reserve Bank will be constrained from lowering the policy rate,” the monetary policy said. “The forthcoming Union Budget must exploit the opportunity to begin this process in a credible and sustainable way.”You can follow Shefali and India Real Time on Twitter @shefalianand and @indiarealtime. Add a Comment Error message Name We welcome thoughtful comments from readers. Please comply with our guidelines, http://www.tomsoutletsalecheap.com - toms shoes . Our blogs do not require the use of your real name. Comment Comments (2 of 2) View all Comments 4:34 pm January 24, http://www.cheaptomsshoessalei.com - toms shoes , 2012 andher nagri chaupat rani wrote: india s economic miracle is based on unprecendented property appreciation and speculation with black money. That can only happen if real rates are kept heavily negative for a long time.This is what politicians love because this gives the illusion of growth and freelunches for cronies.India (and China) are heading to hyperinflation and accompanying social chaos. To be blamed is eventually love of free lunches and easy monetary policy made possible by crony central bankers. Eventually a way will have to be found to create a central bank (and inflation measurement) framework that is fully documented and data dependent. That is, anyone can plugin in verifiable numbers and get the correct answer. The alternative of trusting the henhouse to the central bankers who are beholden to politicians for (re) appointment has led to tears all over, and India is in the process of finding that out. 3:33 pm January 24, 2012 rohit wrote: well, it seems what you wrote came to be true with no red
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