When RBI Governor Duvvuri Subbarao had his tenure extended last year, a TV channel reported that 90 percent of bankers, economists and bond dealers in a poll felt the extension was good for the economy.
In June 2012, less than a year later, people were criticising him for defying widespread calls to cut interest rates, as stubborn inflation continued to bother him more than slowing growth .
Subbarao’s latest decision on Tuesday to hold the central bank’s key policy rate steady may increase the number of his detractors.
The RBI governor has always maintained that his focus is on fighting “sticky” inflation, which hurts the poor, and “some sacrifice to growth is an inevitable price“.
While pro-growth lobbies and Finance Minister P. Chidambaram might not agree entirely with the governor’s view, Subbarao has shown that it is tough to convince him to cut rates for vague fiscal plans.