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Kolkata: Policymakers need to balance output growth and inflationary expectations, Niti Aayog vice chairman Ashok Lahiri said Friday in Kolkata, as bets mount whether Wednesday’s US Federal Reserve move to pause rates gives the Reserve Bank of India (RBI) much-needed breathing space on setting its own rate-trajectory.
"So far so good," Lahiri said, referring to the RBI decision early October to raise the policy rate by 25 basis points to help restrain inflation.
"Just as inflation is a concern, simultaneously maintaining output and employment are important," Lahiri said, responding to ET's query on his expectations of further monetary tightening.
To be sure, bets on further tightening increased after the RBI published the minutes of the Monetary Policy Committee (MPC) meeting earlier this month. Members indicated the likelihood of more rate hikes to curb inflation even as they flagged risks to economic growth, especially in light of elevated crude oil prices.
Lahiri said that the overall business climate is clouded by geopolitical uncertainties and that explains below-par private investments in India.
"The world is suffering from uncertainties. You can't even quantify the risk. It's better to be safe than sorry," he said.
Earlier, at an event organised by CII in Kolkata, Lahiri urged banks to play a role beyond traditional banking and connect industries exploring the West Bengal market with sources of financial resources and pave the path for the state's industrial resurgence.
"Can banking go beyond providing credit? Technically, yes," he said.
Referring to West Bengal's natural resources, he said that there are compelling reasons for industry to come to the state.
On the contentious issue of land acquisition, Lahiri argued that one needs to be rational and understand that industry would look for land where all the connected infrastructure is available.
"We have to accept that people do business to make money," he said, adding: "Bengal needs a push. People should know that Bengal is open for businesses."
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"So far so good," Lahiri said, referring to the RBI decision early October to raise the policy rate by 25 basis points to help restrain inflation.
"Just as inflation is a concern, simultaneously maintaining output and employment are important," Lahiri said, responding to ET's query on his expectations of further monetary tightening.
To be sure, bets on further tightening increased after the RBI published the minutes of the Monetary Policy Committee (MPC) meeting earlier this month. Members indicated the likelihood of more rate hikes to curb inflation even as they flagged risks to economic growth, especially in light of elevated crude oil prices.
Lahiri said that the overall business climate is clouded by geopolitical uncertainties and that explains below-par private investments in India.
"The world is suffering from uncertainties. You can't even quantify the risk. It's better to be safe than sorry," he said.
Earlier, at an event organised by CII in Kolkata, Lahiri urged banks to play a role beyond traditional banking and connect industries exploring the West Bengal market with sources of financial resources and pave the path for the state's industrial resurgence.
"Can banking go beyond providing credit? Technically, yes," he said.
Referring to West Bengal's natural resources, he said that there are compelling reasons for industry to come to the state.
On the contentious issue of land acquisition, Lahiri argued that one needs to be rational and understand that industry would look for land where all the connected infrastructure is available.
"We have to accept that people do business to make money," he said, adding: "Bengal needs a push. People should know that Bengal is open for businesses."
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( Originally published on Oct 30, 2026 )
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