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The policy options before RBI in the current context

Updated : June 03, 2019 08:35 AM IST

Things aren’t looking great on the ground; there are indications of ongoing rural distress, including soft food prices since mid-2016. 
Accounting smokescreens such as Food Corporation of India’s borrowing in lieu of food subsidy, issuance of GOI serviced bonds in lieu of government payments, cash accounting, and the government’s milking of PSU surpluses will likely help understate the true central fiscal deficit by 1 percent of GDP. 
Overall, it is a tough call on whether RBI should provide liquidity relief. 
The policy options before RBI in the current context
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