JOIN USReserve Bank of India Governor D Subbarao, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Prime Minister’s Economic Advisory Council Chairman C Rangarajan attended the meeting.
There was no formal word on what transpired at the meeting, but sources said the global economic situation and its likely impact on the already slowing domestic economy was discussed at length.
The meeting assumes significance in the wake of the slowdown in the growth of the country’s industrial production and consumption levels, partly due to the RBI’s hard monetary stance in the past 18 months.
The surge of inflation in September has added fuel to the fire, which in all probability, will make the RBI to go in for another interest rate hike on October 25. The central bank will try to trade-off on bringing down inflation, even if it meant bringing down growth.
Inflation stood at 9.72 per cent in September, a tad below 9.78 per cent in August. But what is worrying as of now is that inflation has not relented from a high of 9 per cent in the past 10 months.
Industry sources believe raising policy rate again may hamper production and hence affect economic growth.