This is a great insight into monetary policy and its impact on the economy. Clearly monetary policy itself is not a cause for growth, Structural reforms are key. India has managed volatility and moved towards attracting long term investment flows rather than short term alone to creating stability.
The question in my mind then is
have we chose a low growth and low interest rates path ahead as the way. Because high growth comes at the cost of high inflation. Is it back to the Hindu rate of growth. In the meantime we continue to consolidate our economy in terms of writing off excessive debt and face the risk of bankruptcies. See the second chart below the video from www.hedgeye.com that puts this in perspective in the EM context. Dealing with debt is clearly of primary importance before the positive effects of monetary
policy on growth can be felt.
All said great video and insight by the RBI governor.
