‘Benign inflation opens up space to support growth’

With India’s growth momentum facing headwinds from US trade policies, monetary policy committee member Nagesh Kumar, in an interview with Mahesh Nayak, stressed the need for a prompt shift in the policy stance and a multi-pronged policy response to protect MSMEs, diversify exports and support domestic demand. Excerpts:

- @ NAGESH KUMAR, MEMBER, MONETARY POLICY COMMITTEE

Your stance changed from neutral to accommodative. What prompted this shift, and how do you see the policy stance evolving in the future?

The benign inflation outlook opens up the policy space for monetary action. However, as the transmission of existing actions is still unfolding, there was a case for a pause for the moment. Yet, I felt that we may go for changing the stance from ‘neutral’ to ‘accommodative’ to signal the readiness of the monetary policy to support the industry, investments and growth.

What’s holding back private investments even as government capex and consumption drive growth?