While economists and financial analysts are praising the Reserve Bank of India (RBI) for keeping the rates unchanged, the mutual fund veteran Nilesh Shah has said it’s like a Kapil Dev policy.
“The RBI Governor mentioned that the pitch is turning and we will play the ball on merit. Today’s policy is like Kapil Dev Policy. It will manage liquidity, inflation, growth, rupee and financial sector stability in an appropriate equilibrium like a legendary all-rounder Kapil Dev managed bowling, batting, fielding and captainship,” Said Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company.
Shah was taking forward a pertinent remark by the RBI Governor Shaktikanta Das during the policy presentation.
“It is a turning pitch and we will play our shots carefully,” Das had said.
In the last eight months, the Reserve Bank has made all the efforts to keep the growth steady and tame the inflation. While the whole world is struggling with inflation and growth, the central bank has been praised for its policies for evenly balancing the risks.
“The RBI has worked hard to create a balance between growth and inflation setting an example for the rest of the world. This policy continues to take that hard work forward,” Shah added.
The biggest challenge for RBI is managing inflation. It has forecast Consumer Price Index Inflation (CPI) for FY 2023-24 at 5.4%. The RBI adopted a formal inflation targeting framework in 2016. Under this framework, the central bank sets a target for the CPI inflation rate. The target is typically set at 4% with a tolerance range of 2 percentage points. This means that the RBI aims to keep inflation within the range of 2% to 6%. The central bank has estimated GDP to grow by 6.5% in FY24.
