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India's finance minister says monetary authority must abide by govt policy
February 18, 2014 / 5:56 AM / 4 years ago

India's finance minister says monetary authority must abide by govt policy

NEW DELHI, Feb 18 (Reuters) - Monetary authority must abide by the federal government’s policy, India’s finance minister said on Tuesday, adding, in a developing country like India there must be a balance between price stability and growth.

“I sincerely hope that the next government will also adhere to that policy. That is a correct policy for a developing country and a monetary authority must abide by the government’s policy,” P. Chidambaram told television news channel ET NOW.

His comments follow a report from a panel set up by the central bank last month, which suggested the Reserve Bank of India should pursue managing inflation as its main policy objective.

“There is a clear statement of intent that in a developing country, this government believes, there must be a balance between price stability and growth,” he said.

“Sometimes, not enough attention has been paid to that balance.”

India is among a handful of large emerging economies that do not target inflation.

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