New Delhi [India], October 24 : A recent report by SBI Ecowrap report on the minutes of MPC meetings indicates dichotomy of views. It says MPC members have approached voting from different vantage points. Over a period of last few policies voting records of individual members on the policy rate has exhibited diversity.
"Dr. Rajiv Ranjan, the only member to have continuity from August meeting has reiterated his position that policy action is on course to achieve the objective and window of opportunity to revise the stance will be open in October," said SBI Ecowrap report.
In contrast, other committee members have shown varying views. Two members from within the RBI have focused strongly on the issue of inflation. The Deputy Governor highlighted the need to address factors that have been contributing to persistent inflation in the domestic market.
However, the RBI Governor stressed the importance of being flexible to adapt to the changing economic conditions. The report further adds that revision of stand from withdrawal to neutral is influenced by growth imperatives.
"Revision of stance has been influenced by growth imperatives and there is an onset of natural slowdown in the economy on account of tightening although full symptoms have been masked by ambiguity in signal to noise ratio." said the report.
The International Monetary Fund (IMF) has maintained its stand on India's growth at 7 per cent for the current fiscal year, which ends on March 31, 2025, and at 6.5 per cent in the following year. In contrast the global output is projected to grow by 3.2 per cent in both 2024 and 2025.
The report also highlights that in Indian context the timeline for releasing MPC meeting minutes should be advanced to 7 days from the current 14 days.
"The release of the MPC minutes two weeks after the policy by the RBI is also in line with international best practices, although, under India specific conditions, there is a risk of public perception of new data releases post the MPC's meeting influencing these minutes and hence the release timing of minutes may reduce from 14 days to 7 days."
However to do this, the RBI would need to amend its governing laws. According to its Currency and Finance Report (2020-21), there is a suggestion to change the requirement from releasing minutes "at 5 pm on the 14th day from the date of the policy day" to "at 5 pm within seven days from the date of the policy."
This adjustment would help ensure that the RBI's communication remains effective and relevant in a rapidly changing economic environment, providing stakeholders with timely information that could influence economic decisions.
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