Piyush Goyal wants RBI to cut rates, look through food prices; RBI guv ‘reserves’ comment

The CEA had said that the RBI shouldn’t solely focus on targeting food inflation as it could not control food prices. Goyal also said that average inflation under the Narendra Modi government had been the lowest since Independence.

When asked for his reaction to Goyal’s statement at the same event, RBI Governor Shaktikanta Das said he would reserve his comments for the Monetary Policy Committee meeting next month.

Congress questions Goyal’s statement

Reacting later in the day, Congress questioned Goyal’s statement, and said the government only knew one trick: “to change the data if it didn’t suit them”.

“Aside from raising concerns about the RBI’s independence, this statement also shows extreme insensitivity. Food inflation …is a very large component of the budgets of India’s families, and absolutely needs to be considered when setting monetary policy rates,” Congress general secretary in-charge communications Jairam Ramesh said in a post on X.

India’s central bank has a mandate to maintain consumer price inflation in a band of 2-6 per cent. Goyal’s comments came days after government data showed that October retail inflation had breached RBI’s comfort level. Retail inflation increased by 6.21 per cent in the month, the fastest pace in 14 months.

On Thursday, another government release showed wholesale prices in October were also at a four-month-high, driven primarily by an increase in food prices.